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HOCHTIEF makes strong start to 2010, reaffirms guidance for whole year

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HOCHTIEF made a successful start to 2010. The order backlog reached a new high of EUR 36.74 billion with an increase of 17.1 percent (Q1/2009: EUR 31.37 billion*).

Profit before taxes also rose, by 2.5 percent to EUR 120.5 million (Q1/2009: EUR 117.7 million*). All divisions contributed to the positive results. "Our sustained growth shows that the Group is fit for the future," stressed Dr. Herbert Lütkestratkötter, Chairman of the HOCHTIEF Executive Board. Not least in light of the large order backlog and the opportunities available, the Group reaffirms its guidance for fiscal 2010 while its medium-term target remains a pretax profit of EUR 1 billion.

Key figures for first quarter of 2010 New orders came to EUR 3.45 billion, significantly down on the prior-year period (Q1/2009: EUR 4.38 billion) due to contract awards postponed to the next quarter. The shortfall relates partly to business in Germany, but mainly to delays on major contract awards in the HOCHTIEF Asia Pacific division. Much of the difference was made good in April 2010, however. Work done totaled EUR 4.76 billion, on a par with the prior-year quarter (Q1/2009: EUR 4.78 billion*). In terms of sales, the Group slightly improved on the comparative prior-year period to reach a total of EUR 4.45 billion (Q1/2009: EUR 4.40 billion*).

Although the general economic environment began to stabilize from the end of 2009, the effects of the economic crisis were still to be felt at the start of 2010. The long, cold winter also had an impact. Operating earnings (EBITA), at EUR 152.3 million, consequently fell 5.5 percent short of the prior-year comparative figure (Q1/2009: EUR 161.1 million*).

Consolidated net profit was EUR 34.1 million, down somewhat by 11.8 percent on the prior-year period (Q1/2009: EUR 38.6 million*). The application of new accounting standards in line with IFRIC 15 resulted in a positive retrospective adjustment of profit before taxes and consolidated net profit by EUR 20 million and EUR 15.3 million respectively in the first quarter of 2009. Before this special effect, profit before taxes in Q1 2009 was EUR 98.6 million and consolidated net profit EUR 24.2 million.

Divisional performance

The HOCHTIEF Americas division delivered another stable performance as planned in the first quarter of 2010. Turner reinforced its position as the number one US commercial builder with numerous new contracts. The company is constructing a center for accident surgery in accordance with sustainability criteria in San Jose, California. The construction management contract is worth EUR 220 million. Turner also started work on a new stadium: For the Kansas City Wizards, the HOCHTIEF subsidiary is building a multi-use venue that will host up to 27,000 people. In total, the contract runs to some EUR 116 million. Flatiron secured a number of infrastructure contracts in California for a total of EUR 145 million. The company is also to carry out bridge work on the rail corridor connecting Los Angeles to San Diego.

HOCHTIEF Asia Pacific reported another strong result for the first quarter. Leighton subsidiary Thiess secured a EUR 521 million, ten-year follow-up contract at the Curragh North mine in Queensland. A twelve-month contract extension worth EUR 90 million was also awarded at the Meandu coal mine in Queensland. The company additionally profited from a major expansion program launched by the Hong Kong government: Leighton Asia is building a 7.6-kilometer section of the rail link from Guangzhou to Hong Kong. The EUR 311 million contract is due for completion in 2012. The company is also designing and building a EUR 156 million hospital on Hong Kong's Lantau Island.

The HOCHTIEF Concessions division recorded many new successes in the first quarter of 2010. Passenger numbers increased at all airport holdings. Over 20 million passengers passed through the airports in total - compared with 18.7 million passengers in the first quarter of 2009. In the social infrastructure segment, a contract, worth around EUR 50 million, was secured to design and build a new high school in Höhenkirchen-Siegertsbrunn and to operate it for 25 years. Work also began on the D1 motorway in Slovakia after commercial close was reached on the PPP contract. The A5 highway in Vienna was fully opened to traffic, and the official opening was also celebrated at the Fürst Wrede barracks in Munich as well as the Rodenkirchen comprehensive school in Cologne. HOCHTIEF Construction is involved in all of these contracts; the two schools and the barracks are looked after by HOCHTIEF Facility Management.

The HOCHTIEF Europe division performed well in the first quarter. New infrastructure projects in Germany and international activities more than made up for the planned reduction in the German building construction business. The long, harsh winter in Europe slowed down work on many construction sites, however. The largest contract received in Germany during the first quarter was for the North Rhine-Westphalia State Archive: HOCHTIEF Construction is to convert a listed storage building in Duisburg into an archive and erect a new building 150 meters in length. Internationally, the company secured new infrastructure projects:

HOCHTIEF Construction is carrying out the preparatory work on the D1 contract for

HOCHTIEF Concessions in Slovakia. The company is also adding two new gates at Frederic Chopin Airport in Warsaw, Poland.

The HOCHTIEF Real Estate division continued its selective, profitability-focused strategy for the acquisition of new business. A total of 24 projects worth EUR 958 million were under way at HOCHTIEF Projektentwicklung as of March 31, 2010. Almost 50 percent of these have been sold to investors. The pre-lease rate stands at 63 percent. aurelis Real Estate sold properties worth EUR 33.5 million in the first quarter of 2010, sharply increasing its overall sales volume compared with the prior-year period.

The HOCHTIEF Services division continued to rigorously pursue its internationalization strategy. HOCHTIEF Facility Management received a contract for building management at Bahrain Airport. The contract, which is also being carried out with support from HOCHTIEF Concessions, is worth EUR 85 million and initially runs for six years. In Germany, the company expanded its outsourcing business and took on technical facility management for two plants and the head office of the Vorwerk Group. HOCHTIEF Facility Management received a follow-up contract from Hessisches Immobilienmanagement for technical operation of a further 22 public buildings in the German state of Hesse. HOCHTIEF Energy Management was commissioned by Postbank to reduce the company's energy costs by 15 percent a year at eight locations. The contract runs for ten years.

Outlook

The world economy has started to recover. HOCHTIEF is keeping a close watch to see how rapid and sustained the recovery proves to be. Profit forecasts can be affected by exchange rate movements. The outlook is based on the assumption that the financial and capital markets will normalize again in the current year, there will not be a sustained recessive setback in the world economy, and the situation in areas of political tension will not lastingly deteriorate any further. On these premises, the Group continues to expect:

■ New orders and an order backlog slightly below the prior-year level;

■ Sales roughly on a par with 2009;

■ Profit before taxes and consolidated net profit slightly above the 2009 level.

This guidance is based not least on the very high order backlog and the opportunities available. The Group's medium-term aim remains a pretax profit of EUR 1 billion.

* Prior-year figures restated on first-time application of the new IFRIC 12 (applied from January 1, 2010) and IFRIC 15 (applied from September 30, 2009). For further information, please see pages 14 and 17 of our Quarterly Report for January to March 2010.

Refer to full documentation in attachments box, located at the top left, below the headline.

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