Balfour Beatty, the engineering and construction group, swung into the red in the first half of the year, after slashing the value of its stake in Metronet, the London Underground maintenance group, to nothing.

Balfour yesterday reported pre-tax losses of £52 million for the six months to the end of June, after it booked a £103 million writedown on the value of its Metronet stake and on related work.

Last year the group made pre-tax profits of £35 million in the same period.

The company was a key shareholder in the Tube contractor, which has a government contract to upgrade and maintain nine of the capital’s Underground lines.

It was put into administration in mid-July under the weight of nearly a £1 billion of cost overruns.

Ian Tyler, the chief executive, sought yesterday to draw a line under its part-ownership of the company, stating that it had made provisions for the full impact of the company’s slide into administration.

Balfour remains a contractor to Metronet under separate agreements.

Mr Tyler said Balfour would continue to provide engineering services to London Underground and added that its involvement in Metronet would not damage its growth prospects.

In June Balfour reduced the value of its Metronet stake to zero in its accounts, when it decided to take a one-off £100 million charge.

Pre-tax profits before exceptional items rose by 36 per cent to £76 million, underpinned by growth across all its businesses and a first-quarter contribution from Balfour Construction US.

The group is paying an interim dividend of 4.6p, up from 3.9p last time.

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