Hochtief improves profits

By Sandy Guthrie31 July 2015

Marcelino Fernández Verdes

Marcelino Fernández Verdes

Hochtief has reported what it claimed was a substantial improvement in profits, margins and cash flow in the first half of 2015, and said it was showing a strong new order intake in the second quarter.

The figures follow the disposal of a number of assets in 2014 as part of a strategic restructure.

Chairman of the executive board Marcelino Fernández Verdes said, “We are increasingly benefiting from the results of the strategic transformation.”

The company reported that operational net profit was up by 35% in the first six months of 2015 to €129 million adjusted for one-off items – such as divestments and restructuring expenses – compared to a figure for the same period in 2014 of €95 million.

Operational earnings before tax (EBT) also rose strongly, it said, by 36% to €314 million. Nominal results – including one-off items – showed an increase of 61% in profit before tax to €285 million, and a 7% improvement for net profit to EUR 108 million.

All three of its divisions – Americas, Asia Pacific and Europe – contributed to this improvement, it said.

In the second quarter of 2015, the group recorded a higher new order intake of €7.1 billion, taking total new orders in the first half to more than €11.9 billion – up 16% year-on-year.

It said its order backlog remained “robust” at €37.2 billion, “representing a solid forward order book”.

In particular, it pointed to its Australian contracting arm CIMIC – formerly Leighton – saying it contributed to the positive trend in group orders in the second quarter of 2015.

“The solid figures from CIMIC show that the transformation is having a positive effect,” said Fernández Verdes.

“The new contract awards include the construction and extension of highways in Sydney and Melbourne. CIMIC secured its first contract in South America, operating a copper mine in Chile. In addition, CIMIC recently won the contract to build a boundary control point on the border between Hong Kong and China worth a total of AU$1.2 billion (€797.39 million).

The Hochtief Americas division also secured some important contracts. Its US civil engineering company Flatiron will build the first high-speed rail link in the US, between Los Angeles and San Francisco.

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