Downer EDI shares nosedived following the update on FY2023 guidance

Downer EDI Limited (ASX: DOW) has provided NPATA guidance for FY2023 to reflect the below.

• Accounting irregularities in Downer’s Australian Utilities business: The Company highlighted that it identified some accounting irregularities in its Australian Utilities business. It includes historical misreporting of revenue and work in progress in one of DOW’s maintenance contracts. Currently, a detailed investigation has been initiated and is being treated with the topmost priority.
• In August 2022, the Company announced that it expects growth in underlying FY2023 NPATA in between 10% to 20%, assuming that there will be no significantCOVID-19, weather, labour shortages or other disruptions. However, in the AGM on 03 November 2022, the Company’s CEO confirmed that difficult weather conditions and higher cost to serve issues had plagued Q1 FY2023, mainly in Australia’s Eastern States and New Zealand. However, a few of the businesses were unaffected.

Based on analysis of the Group’s trading for October and November, the Company highlighted that it would not be able to meet its FY2023 guidance.

At AEDT 12:13 PM, DOW shares are trading at AU$3.770, down 21.458% from its previous close. 

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