Bilfinger’s third profit warning in three months
By Neill Barston05 September 2014
German-based construction and industrial services company Bilfinger has issued its third profit warning in three months, as it faces competition within a growing sustainable energy sector.
The statement follows Roland Koch’s resignation as its Executive Board chairman, amid previous profit downgrades resulting in former head, Herbert Bodner, being appointed on an interim basis.
According to the company, low price levels meant earnings expectations for 2014 “must be significantly reduced once again.”
Its forecast earnings before tax are €270 million, against €419 million for 2013, with net profit expected of €160 million, compared to €255 million achieved last year.
The company explained that although its performance this year had been worse than expected, it had forecast the second half of 2014 to be stronger.
It said, “Management changes and new business processes need more time to effectively establish themselves. In addition, the difficult market situation in the energy and European oil and gas sectors also plays a role.
"Although Bilfinger anticipates a substantial increase in earnings in the second half of 2014 as compared to the first six months, the EBITA margin for 2014 will be below the prior-year figure (5.8%).”
As a result, the company also intends to write down its €30 million investment in production facilities manufacturing steel for offshore wind turbines in Poland, which is not included in its tax-adjusted profit figures.
Among the key issues affecting its performance is believed to be the German drive for up to 50% renewable energy targets over the next four decades.
This has reportedly seen the emergence of subsidised renewable energy that has placed pressure on conventional energy prices.