Strabag confirms lower output

Contractor Strabag has reported a -2% drop in 2010's output volume to € 12,8 billion, driven by business declines in Germany and Hungary.

The result was in line with a revised 2010 forecast released by the contractor in November last year.

The Austrian construction company said growth in its transport infrastructure business in Poland had been offset by "considerable declines" in output volume for the sector in Germany and Hungary.

Output in Strabag's building construction and civil engineering segment was also "considerably below" 2010's levels after being impacted by bad weather over the winter, the company said.

Strabag said these burdens, in combination with a lack of projects in tunnelling, had a greater effect on results than the boost the company received from new large-scale projects last year.

Overall, transport infrastructure output volumes grew +1,8% to € 5,8 billion, while output in building construction and civil engineering fell -3,3% to € 4,3 billion.

But Strabag was upbeat on prospects for 2011 and beyond. It said it expected output volume to rise by +5% next year to € 13,5 billion, adding that single-digit growth "remains realistic" in the following years.

This growth forecast came after the company's order backlog grew +6% in 2010 to reach € 14,7 billion - a record year-end figure, according to Strabag.

The main engines for growth were expansion in northern European markets and the Middle East as well as rising demand in Russia.

The company also noted that state stimulus packages backing public-sector infrastructure projects in the past financial years were being replaced with new austerity measures by the end of the year.

As such, Strabag said its building construction and civil engineering segment, which relies mainly on private clients, "will be of greater importance in the future".