Engineering group Downer EDI is on track to meet its full year profit forecast despite a drop in spending by its clients in the mining sector.
The company in August flagged lower profitability for the current financial year, as customers tightened belts following the collapse in commodities prices.
It had posted net profit of $210 million in 2014/15 but expects that to fall to $190 million this financial year, in line with its recent forecast.
"At this point in the year, whilst some of our markets are challenging, I confirm this guidance," chief executive Grant Fenn told shareholders at its annual general meeting on Wednesday.
The confirmation perked up shares in the company, which have fallen nearly a quarter in the past six months.
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Downer's shares closed three cents higher at $3.65.
The company's main mining division, which carries out contract mining and earthmoving, had suffered a 20 per cent drop in revenue in the previous financial year, hit by contract completions and volume reductions amid falling commodity prices.
"We expect the current low levels of mining related capital expenditure to continue through 2016 and customers across the board to focus on costs and efficiency," Mr Fenn said.
To offset the impact, the company is simultaneously building capability in other divisions, particularly in light rail design and construction, he said.
Downer's transport services division is bidding for two substantial passenger rail opportunities.
The company is among four shortlisted bidders for the NSW inter-city fleet project for the supply and maintenance of a new fleet of around 520 passenger carriages. The contract is expected to be awarded next year.
The group is also in the early stages of bidding to supply 37 high-capacity trains for the Victorian government, with the contract expected to be awarded in late 2016, Mr Fenn said.
