Heijmans warns of net loss for 2011

Dutch contractor Heijmans said it expected to report a maximum net loss of €40 million for full-year 2011 after being hit by write-downs and reorganisation costs. But the company said it still expected to see positive underlying operating income of €25 million for the 12-month period.

The contractor's bottom line has been affected by poor returns in its non-residential building and prefabricated concrete divisions, and it warned that it now expected results from these businesses to be "more negative than foreseen before".

Heijmans said its losses from non-residential building were mostly related to higher costs for projects and "meagre quality in execution". It said it would change management and project control and make adjustments to the organisation of the division, mainly on the sales side.

The company has put aside €10 million to reorganise the non-residential division and the prefab division - a business area which it announced it would be downsizing in December last year. It is sharply reducing the production capacity of its Bestcon factory in response to "difficult" conditions in the prefab market, and transforming the factory into an internal production facility.

Heijams said it had also been hit hard by a "persistently weak" housing market, and the outlook remained poor. As a result, the contractor said it expected to report a devaluation of at most €45 million on its property positions as well as a goodwill impairment of around €10 million.

Offsetting this, the contractor said operational results at its road building, civil engineering and residential building divisions remained at "solid, positive levels". It will publish its annual results on 1 March.