The ratings on Leighton Holdings Ltd. reflect our opinion of the company's following strengths: leading market position in Australia's growing infrastructure construction and contract mining sectors; significant business, industry, project, and geographic diversity; and "intermediate" financial risk profile. Moderating the rating strengths are the unrated parent, Hochtief AG; Leighton's inherent exposure to the competitive and cyclical-heavy engineering and construction (E&C) sectors; and the performance risks related to mining contracts and large complex E&C projects. Project cost blowouts have led the company to revise its earnings forecast, undermining the group's business risk profile. The cost overruns were related to two Australian construction projects (Airport Link and Victorian Desalination Project), which had already incurred sizable losses in the 12 months to June
