ACS reports €1.2 billion loss
By Helen Wright31 August 2012
Spanish contractor Actividades de Construcción y Servicios (ACS) was forced to book a €962 million impairment charge on the declining value of its stake in utility company Iberdrola, pushing it to a first half loss of €1.2 billion, compared to net income of €604 million last year.
In April, ACS sold a 3.7% slice of its holding in Iberdrola for €800 million, leaving it with a 14.9% stake. But the value of its investment in the Spanish energy contractor has fallen as the country's economy has deteriorated, and is now valued by ACS at just over €3.7 per share, compared to an average of €7.1 per share when it started buying into the company in 2006. Iberdrola shares are currently trading at €3.1 per share.
The write-down overshadowed otherwise generally positive results for the company, which is consolidating its acquisition of German contractor Hochtief - a development which has boosted its construction division and fuelled a massive 99% jump in revenues for the first half to €18.8 billion.
Net sales in construction totalled €14.3 billion for the first half, up 186.5% year-on-year. But the division recorded a net loss of €98 million, compared to income of €134 million in the first six months of 2011.
This mirrored Hochtief's fortunes, which itself reported a net loss of €49 million for the first half after project overruns, despite a year-on-year rise in revenues.
ACS's construction backlog stood at €53.5 billion at the end of the first half, up 10% year-on-year. The backlog growth was boosted by strong activity in the US and Australia, while domestic Spanish business performed poorly.