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| Hochtief affected by earnings collapse in Asia The first quarter of 2011 is marked by the earnings collapse at Hochtief Asia Pacific. Subsidiary Leighton significantly reduced its guidance in April. Hochtief had to scale back its own guidance in April substantially for fiscal 2011 as a result. Despite an outstanding performance in the first quarter, the Hochtief Americas, Hochtief Concessions, and Hochtief Europe divisions could not compensate this development. The Group forecast for fiscal 2012 and 2013 is confirmed, however, without change. New orders totaled EUR 5.41 billion, 56.9 percent (exchange rate adjusted 48 percent) higher than the comparative prior-year figure (Q1/2010: EUR 3.45 billion). The increase was accounted for by the Hochtief Asia Pacific division, which secured many major new contracts. Work done came to EUR 5.10 billion as of March 31, 2011, an increase of 7.3 percent on the prior-year period (Q1/2010: EUR 4.76 billion); on an exchange rate adjusted basis, the increase was 1.9 percent. The strongest contribution to this came from the Hochtief Asia Pacific and Hochtief Europe divisions. The prior-year figure was comfortably exceeded in Germany as a result of strong performance by the Hochtief Europe division, with growth of 23.8 percent. The order backlog stood at EUR 45.61 billion, an improvement of 24.9 percent (exchange rate adjusted 20.1 percent) on the comparative figure for the prior year (Q1/2010: EUR 36.52 billion). This is equivalent to a forward order book of more than two years for Hochtief. Operating earnings (EBITA) dropped steeply in the first quarter of 2011, with a negative figure of EUR 404.3 million marking a sharp deterioration from the comparative prior-year period (Q1/2010: positive EUR 152.0 million). This mainly related to a substantial decrease in earnings at Leighton. Notable factors in that decrease comprise an expected loss on the AirportLink road project in Brisbane and a significant reduction in expected profit on the Victorian Desalination Plant project near Melbourne. Due to ongoing late payment of outstanding receivables in the Gulf region, Leighton's management has also decided to recognize an additional EUR 88 million in provisioning for outstanding receivables at the Al Habtoor Leighton Group and to subject Leighton's investment in the Al Habtoor Leighton Group to an impairment test as of June 30, 2011. As a result of the substantial impact on earnings at Leighton, Hochtief reports a loss before taxes of EUR 444.8 million for the first quarter of 2011. This places the Group substantially down on the profit before taxes of EUR 120.5 million in the prior-year period. On the bottom line, the Group recorded a consolidated net loss for the first quarter of 2011 of EUR 169.5 million (Q1/2010: consolidated net profit of EUR 34.1 million). For the current fiscal year, Hochtief continues to expect that new orders, work done, and the order backlog will normalize at a level below the record figures of 2010 and that sales will be broadly on a par with 2010. Depending on the size and outcome of the sale of interests at Hochtief Concessions, the Group expects profit before taxes to be about half of the prior-year figure, but consolidated net profit to be above the level recorded in the prior year. The projections for 2012 and 2013 remain unchanged: For 2012, Hochtief anticipates a pretax profit of approximately EUR 1 billion and consolidated net profit of some EUR 500 million - according to the outcome of the aurelis Real Estate divestiture. In 2013, the Group plans to attain pretax profit in excess of EUR 1 billion and consolidated net profit of around EUR 450 million excluding non-recurring income - that is, from the operating business. write your comments about the article :: © 2011 Construction News :: home page |