Strabag 2012 net income drops 70%

Austrian contractor Strabag reported a 70% year-on-year drop in net income for 2012 to €60.6 million, while revenues also declined 5% compared to 2011 to €13 billion.

Strabag said its earnings had been hit by missing payments for services already rendered in Central and Eastern Europe, damage compensation payments for a failed acquisition as well as considerable construction site losses and losses from joint ventures.

But it pointed out that its output volume – which stood at €14 million, down 2% year-on-year ­– had remained relatively resilient against a backdrop of low public-sector infrastructure expenditure. It said the largest reduction was registered in Poland, due to the end of the construction boom in that country.

Elsewhere, declines in several countries in Eastern Europe were countered by increases in Germany and in Romania, according to the company.

Looking ahead, outgoing Strabag CEO Hans Peter Haselsteiner – who is due to step down in June, a year earlier than originally planned – said the company was disappointed by its earnings.

“Most of the factors contributing to these disappointing results are one-offs as well as construction site losses, which therefore won’t have a significant carryover into the current year. Therefore, we reiterate our goal to achieve double-digit growth in earnings 2013,” he said.

Strabag expects its 2013 output to remain unchanged over 2012 at €14 billion. It said further expected reductions in Poland should be countered by increases in tunnelling, in its international business and in building construction in Austria.

“While the management board of Strabag expects another slight worsening of the business environment in the European construction sector in 2013, it also believes that there will be no larger negative one-off items as in 2012. The management board therefore expects to see the group’s earnings before interest and tax grow to at least €260 million in the 2013 financial year. This corresponds to an increase of at least 25 %,” the company said.