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| Hochtief reports substantial increase in cash-backed profits and margins in Q3 2016 Hochtief achieved a strong performance in the third quarter of 2016 with an acceleration in the growth rate of profits, cash flow and new orders supported by a strengthened balance sheet. "The consolidation of our strategy provides the basis for our further improved operational performance and positions us well for the future, " said CEO Marcelino Fernández Verdes. Operational net profit rose by 45% year on year in Q3 2016 to EUR 89 million leading to a nine-month result of EUR 249 million, up 31% on the corresponding period of 2015. Nominal net profit in the first three quarters rose by 48% to EUR 223 million. Earnings per share grew by 56%. Operational profit before tax (PBT) increased in the third quarter by 10% to EUR 154 million and in the first nine months by 6% to EUR 481 million. Thanks to rigorous ongoing cost control, optimized capital expenditure and reduced interest expenses as well as further improvements in contract bidding and risk management, the Group's operational PBT margin increased by 50 basis points to 3.3%. All three divisions—Americas, Asia Pacific, and Europe—contributed to the increase. The improved margin was achieved in spite of an expected lower level of sales of minus 5% in the third quarter of 2016 year on year. The sales trend had already reversed in Q2 2016 with a 12% increase on the preceding quarter. Sales grew slightly in Q3 2016 by a further 2% compared with the previous quarter. The rise in profits and margins at Hochtief is backed by increased cash generation. Net cash flow from operating activities of EUR 444 million in the third quarter of 2016 represents a rise of 35% year on year with all divisions contributing to the increase. Net cash reached EUR 365 million in the first nine months, an increase of EUR 226 million year on year. Adjusted for the cash outflow from the share buyback programs at Hochtief and CIMIC, dividends, and the acquisitions in Australia, the net cash position at the end of September would stand at over EUR 1 billion. New orders rose a substantial 14% in the first three quarters to EUR 19 billion. In total, Hochtief consequently improved the order backlog to EUR 39.2 billion, marking annual growth of 10%. This was helped along by major projects including a tunnel in Hong Kong worth EUR 1.1 billion, the expansion of mining company Thiess into the Canadian market, a bridge project in West Virginia, USA, and the contract award for construction of the Marienturm high-rise in Frankfurt. In October, a Hochtief consortium additionally secured a EUR 1.3 billion public-private partnership contract to widen and operate a section of the A6 freeway in Baden-Württemberg, Germany. The number one general builder in the U.S., Turner has been commissioned to build a high school in Massachusetts and a residential high-rise in Seattle. All divisions contributed to the successful first nine-month performance. Hochtief Americas increased operational profit before tax by 24% to EUR 153 million. CIMIC improved its net profit after tax in the first nine months by 6% to AUD 414 million, and net profit margin by a substantial 170 basis points to 5.4%. Hochtief Europe maintained its positive trend, generating operational PBT of EUR 26 million versus EUR 13 million in 9M 2015. Group guidance confirmed For 2016, Hochtief expects operational net profit of between EUR 300 million and EUR 360 million, representing an increase of approximately 15% to 35% year on year (2015: like-for-like operational net profit of EUR 265 million). write your comments about the article :: © 2016 Construction News :: home page |