Hochtief back to profit for third quarter

14 November 2011

German contractor Hochtief was back in the black for the third quarter, reporting net profit of €231 million, compared to €93.5 million in the same quarter last year.

Sales rose 10.9% year-on-year for the nine-month period to €15.8 billion, and stood at €5.4 billion in the third quarter, compared to €4.7 billion last year. The company's order backlog reached €44.5 billion at the end of the third quarter, up 8% year-on-year.

Hochtief said its third quarter results had also been boosted by a turnaround at its Australian subsidiary, Leighton, which had been largely responsible for dragging the group to the first half loss. Leighton is forecast to report full-year net profit of between €400 million and €430 million for the 12 months to 30 June, 2012.

Nevertheless, Hochtief's nine-month results did not recover from the half-year loss, and the company reported a net loss of €96 million for the period from 1 January to 30 September, compared to net profit of €294 million over the same period in 2010.

And Hochtief warned that its full-year results could also be negatively impacted by a delayed asset sale. It said that if its attempts to sell its airport division are delayed beyond the end of 2011 - a prospect which it conceded was possible due to current financial market turbulence - it would lead to the company reporting a consolidated net loss of around €100 million.

Interest from bidders

Dr Frank Stieler, chairman of Hochtief's executive board, said, "The bidders continue to show keen interest in our airports business. Sales and passenger numbers are up at our airports in the current fiscal year. But the macroeconomic situation has caused delays in the sale of the airport activities. Hochtief is still in close negotiations and is confident of being able to seal the transaction in the near future. It is nonetheless possible that this will no longer happen in 2011 as previously announced."

The contractor said it was also reviewing potential risks for individual public-private-partnership road contracts in Greece and Chile as a result of the global economic turmoil.

Despite this, Hochtief said it expected its 2012 earnings to be "significantly higher" than the record 2010 results after including all earnings effects from the airports sale and income from the sale of its interests in Aurelis Real Estate.

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