Leighton Holdings, Australia's largest construction company, said its receivables had grown in the first half which dented its cash flow.
Leighton, which operates in Australia, Asia and the Middle East, said receivables, or outstanding payments for a company, rose to A$4.4bn (US$4.03bn) at June 30, 2013 from the A$3.8 billion at full-year 2012.
Receivables grew due to rising numbers of private-sector projects, "scope growth" on certain resources projects and the "complexity and time-consuming nature of valuing and negotiating project variations", the company said in a statement.
"They booked the revenue but they are not getting the cash flow. Clients have not paid them yet," said Shane Delphine, an investment manager at Karara Capital.
Investors were disappointed the level of receivables had not improved from 2012, he added.
The Dubai arm of Leighton last week launched a series of suits seeking more than AED1bn ($272m) from a prominent member of Qatar's royal family in compensation for late payments on a hotel project in the Qatari capital.
"We will mitigate any potential country risk by our core competency and by our client selection," Leighton CEO Hamish Tyrwhitt told Reuters when asked about the payment concerns.
The company also said that the "timely conversion of receivables into cash is a key focus for the remainder of 2013", as it reported a doubled underlying net profit for the first half.
Leighton, controlled by Spain's ACS, posted an underlying net profit for the six months ending June 30, 2013 of A$255 million, excluding asset sales and impairments.
The result fell below analysts' forecasts for A$287.5 million, according to Thomson Reuters data, even though it was more than double the A$115 million reported a year ago.
Leighton sold 70 percent of its telecommunications assets including NextGen Networks fibre-optic business to Canadian pension fund Ontario Teachers' Pension Plan in the first half, in a deal valuing the assets as A$885 million.
Leighton reaffirmed its 2013 full-year guidance for underlying net profit of A$520 million to A$600 million ($473-$545 million), and a gearing level of 25 to 35 percent by the year end.
It raised its interim dividend to A$0.45 per share, from A$0.20 per share a year ago.
Leighton's majority owner Hochtief AG increased its stake in the company last month, taking advantage of a share price slump to raise its exposure to fast-growing Asian markets. Hochtief, which now owns 56.4 percent of Leighton, is in turn controlled by ACS.For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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