Bilfinger Berger cautious on 2012

13 February 2012

German contractor Bilfinger Berger reported a preliminary 39% year-on-year increase in net profit for 2011 to €394 million, but has played down prospects for this year.

The company repored a 5% rise in output volumes for the 12 months to 31 December, 2011, to €8.5 billion, boosted by a 12% year-on-year increase in its industrial services output and a 5% increase from its construction division. The power services division also recorded a 5% year-on-year increase in output, while building and facility services output fell 3% in 2011 compared to 2010.

Looking ahead, Bilfinger Berger said it expected overall output volume to decrease this year, driven down by a strategy to lower output in its construction business segment, together with its plan to continue to reduce its shareholding in its Nigerian subsidiary Julius Berger Nigeria (JBN).

"Austerity measures initiated by the public sector will lead to weaker demand for civil engineering. Regardless of this development, output volume in the construction business segment will decline following the completion of a major project and reach the magnitude that has been planned for some time," the company said.

Nevertheless, Bilfinger Berger said it expected 2012 net profit to be "significantly higher" than €220 million - the 2011 net profit figure when adjusted for earnings from discontinued operations. This forecast was attributed to increasing margins and capital gains from divestments.

The company's mid-term strategic outlook projects an increase in output volume of up to 50% by 2016, while net profit should double. To achieve these goals, Bilfinger Berger said it would seek to grow both organically and through acquisitions - it is targeting over €1 billion in acquisitions in the next four years, with particular focus on the expansion of its services business.

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