Asset sales boost profits at Impregilo
By Helen Wright17 March 2011
Net profit at Italian contractor Impregilo grew +61% in 2010 to € 128,4 million, reflecting one-off gains from the sale of its Argentinian motorway concession business, Caminos de Las Sierras, and the partial sale of its Brazilian logistics subsidiary, Elog.
The boost from asset sales helped to offset a -24% year-on-year drop in Impregilo's revenue to € 2,1 billion as delays in new construction projects in Italy and a slump in Middle East sales from its water desalination business impacted results.
Long-running legal troubles relating to waste contracts in southern Italy also hurt full-year figures. The company has been unable to collect funds from the Acerra waste-to-energy plant it built in Campania due to ongoing legal disputes with authorities, resulting in losses on the projects and contributing to a € 680 million drop in group operating revenues to € 1,9 billion for 2010.
A review of the case in the Italian Supreme Court is scheduled for 22 March.
Meanwhile, Impregilo's order backlog at 31 December stood at € 23,1 billion and includes a contract to widen the Panama canal and orders in Libya.
The company said that the serious internal conflicts which have developed in Libya since the start of the year are "of particular significance to the group". Impregilo's Libyan subsidiary, Impregilo Lidco, has in recent years won a number of housing an infrastructure contracts in the country.
"Although the situation does not present material difficulties at this time, since the limited investments made to date have been covered in full by the contractually agreed advance payments, it does present issues of concern over the short/medium term with respect to the actual capacity for productivity growth," the company said.
Impregilo said it does not expect to see significant signs of a turnaround in its international and domestic markets in 2011.
For 2015 the group forecasts aggregate net sales of € 4 billion, a contract backlog of € 18 billion euro, and a concessions backlog of € 16 billion.