Bilfinger posts losses after profit warnings

A preliminary third quarter statement from Bilfinger has warned the company’s power division requires a “fundamental reassessment” after posting negative net year-to-date profits of - €125 million.

This compared to a net growth figure of €116 million for the same period last year – contrasting with the company’s continued difficulties in 2014 as it faced three profit warnings this summer.

According to the industrial service firm’s management statement, it has experienced a “difficult market environment” with significantly worsened demand in Germany and other European countries.

It said that its annual profit forecast had now been downgraded for 2014 and subsequent years, with its power business suffering an impairment loss totalling €148 million.

Profits were hit by several key factors including a write-down of €30 million on investments in a Polish steel operation, €35 million cost of an efficiency savings programme and €20 million spent on restructuring within its power division.

The company’s industrial business segment also declined in profits – reducing from €147 million to €127 million. It attributed this to a lack of investment in power plants and problems with issues surrounding power processing within the sector.

This has been reflected in a reduced order book, with a backlog of business totalling €6.13 billion for the year, compared with €6.42 achieved last year.

It has forecast an EBITA level for 2014 of at least €270 million, as against €419 million for 2013. Consequently, a net loss of €230 million is expected for the full year.