UGL slumps on profit warning Engineering and mining contractor UGL has slashed its full-year profit guidance, blaming the slowdown in mining investment and poor project performance for its second downgrade this year. Shares in UGL slumped as much as 15.6 per cent to $8.08 in morning trade. Underlining the pressure on contractors as the big miners wind back on exploration and capital spend as record commodity prices wane, UGL said it now expects to report net profit of between $90 million and $100 million, compared to its previously revised guidance of between $150 million and $160 million given at its half-year results in February. "Ongoing uncertainty and volatility in commodity markets have driven a continued slowdown of capital investment in the resources and infrastructure sectors with further delays of major projects impacting revenues in the engineering business,"" chief executive Richard Leupen said in a statement to the stock exchange this morning. ""Additionally, the cost management programmes of the major miners have led to scope reductions and cancellations across UGL's operations and maintenance business." The string of downgrades is a taint on the outgoing chief executive, who has taken pride in staving off the volatile earnings swings experienced by fierce competitors including Leighton Holdings and Downer EDI. The long-serving Mr Leupen has been among the most vocal in tipping the end of the resources boom and increasingly shifted the group's focus toward the more stable income stream of property management and maintenance services. In its announcement, UGL provided further signs that it would go ahead with the demerger of of its global property business, DTZ, from the rest of the group. ""The board has noted that a demerger appears more likely than other options to optimise value for UGL shareholders,"" it said. UGL said its property business provided a bright spot and was expected to record its eleventh straight year of earnings, and would come close to accounting to half of the group's earnings within the next few years. ""Internationally, we are encouraged by the growth potential in both the USA and Asian markets, particularly China where we anticipate growth of nearly 20 percent [this financial year]."" UGL will provide an update on whether it decides to split by its full-year results on August 12, it said.