Bilfinger warns of annual profit loss

German-based engineering and industrial services firm Bilfinger has confirmed its €125 million year-to-date losses, which it attributed to “a difficult market” in its power business.

Its weakened results followed a series of three profit warnings that led it to forecasting an annual loss – stating it will have to revise its projected profit for subsequent years.

Consequently, its year-to-date order book stood at €5.12 billion – down 9% on last year’s figure of €5.6 billion for the same period. Its net profit loss contrasted with 2013’s results, in which it posted third-quarter year-to-date growth of €116 million.

Among its key areas of concern had been a lack of investment in creating new power plants. It said this was a key factor affecting its profit margins within the processing sector.

Bilfinger’s turbulent performance comes as the company appoints its new supervisory board chairman Dr Eckhard Cordes. The former Cevian Capital partner has succeeded Dr Bernhard Walter, who stepped down from the board last week.

The company said, “The Bilfinger Group’s output volume in the full year will be in the magnitude of the previous year (€7.7 billion). Bilfinger anticipates adjusted EBITA (earnings before interest, tax and amortization) from continuing operations of at least €270 million after the previous year’s figure of €419 million.

“Accordingly, adjusted net profit from continuing operations of at least €160 million is expected against the previous year of €255 million. These items will amount to approximately minus €230 million after taxes and minority interest in 2014, which will lead to a net loss for the year.”