Construction giant Leighton Holdings has returned to profitability and says it is now better placed to pick the right infrastructure projects after a couple of disastrous years of losses.

The construction giant posted a net profit of $450.1 million in the 12 months to December 31, compared with a $285.5 million loss for calendar 2011.

Chief executive Hamish Tyrwhitt forecast an underlying net profit of between $520 million and $600 million for 2013, subject to market conditions.

The company has lost an estimated $1 billion to $1.2 billion on cost blowouts at the Brisbane AirportLink (APL) and the controversial Victorian desalination plant (VDP) projects.

Those projects had now been completed, freeing Leighton to pay down debt, repair its balance sheet and urgently bolster its risk management systems.

"There have been a lot of changes around the process to mitigate risk and reducing the likelihood of onboarding projects that are not going to meet expectations," Mr Tyrwhitt told AAP.

He said the group had an incredibly strong order book of $43.5 billion of work in hand - $1.1 billion down on a year ago - but was pursuing better margins and not growth for growth's sake.

Recent lucrative wins included $1.5 billion building offshore gas and liquefied natural gas projects including the Ichthys plant in Darwin.

Investors liked the outlook and result, sending Leighton shares $1.65, or 7.9 per cent stronger, to $22.46 by 1420 AEDT.

The stock is up 50 per cent since August.

Mr Tyrwhitt said his cautious optimism was related to the strong urbanisation and economic growth of above seven per cent a year in Asia, with Leighton being contracted to build infrastructure there or involved in contract mining in Australia.

"We are sitting at the foundation of the Asian century," he said.

"There is ongoing need for infrastructure, ongoing demand for resources Australia produces and we participate in that work."

Net debt is higher at $914 million, from $641 million a year ago, but far better than six months ago with gearing - debt to equity - at 35 per cent down from 48 per cent with a new board target of 25 to 35 per cent.

The group's loss-making Middle East-based Habtoor Leighton group (HLG) - in which Leighton has a 45 per cent stake - is its biggest problem child.

It contributed just two per cent of revenue and is owed $807 million, much of it unpaid contracts for finished projects.

Its value was written down by $82 million during the year to $297.7 million.

Mr Tyrwhitt described that business as his key focus and something that he wanted to make ready to spin off on the share market with an independent balance sheet and providing "all of Leighton's offerings" in the Persian Gulf states by 2016.

Morningstar equities analyst Ross Macmillan said Leighton was doing a good job of fixing its balance sheet and lowering costs but that it should be earning $550 million in net profit.

A half-franked final dividend of 60 cents a share will be paid, in line with last year's payment.

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