Hochtief reports first-half loss
15 August 2012
Despite reporting a 16% year-on-year rise in sales for the first half of 2012 to €12 billion, German contractor Hochtief continued to feel the impact of project overruns and recorded a net loss of €49 million for the first six months of the year.
Nevertheless, the result was an improvement on the €156 million consolidated net loss it reported for the first half of last year.
In addition, the overrunning projects at its Australian subsidiary Leighton that have had a considerable financial impact on the group look likely to be resolved soon, and Leighton itself returned to profit for the first half.
Separately in Germany, Hochtief Europe was forced to make provisions in its accounts for a longer construction period on the Elbe Philharmonic Hall project in Hamburg.
The group said it would claim reimbursement of these costs, which resulted in the Hochtief Europe division reporting an operating loss of €60 million, compared to profit of €68 million in the first six months of 2011.
Chairman of the Hochtief executive board Frank Stieler said, "This nonrecurring item is the reason why we do not yet have a consolidated net profit in the group at the half-year point."
He added that the company expected the proceeds from the July sale of its 45.45% stake in Chilean toll road operator Vespucio Norte Express for €230 million to offset the negative impacts at the Elbe Philharmonic Hall.
Meanwhile, Hochtief reported a 25% increase in new orders to €16 billion, while the company's order backlog was up 13% to €53 billion.
For the full-year, the contractor said it expected its backlog and sales figures to "normalise" below its 2011 record, while new orders are expected to be on a par with last year.
However, it said it would now be "much more difficult" to achieve its full-year net profit forecast of €180 million.
