Double-digit growth for Strabag

Double-digit growth in earnings before interest and taxes (EBIT) has been reported for the first nine months of the year by Austrian-based contractor Strabag, while its order backlog has decreased.

Strabag said it had generated output volume of €10.25 billion in the first nine months. The increase of 6%, it said, was driven primarily by the markets of Slovakia, Germany, the Czech Republic and Poland. Consolidated group revenue, like output volume, also grew, it reported, gaining 7% to € 9.48 billion.

The company said that different trends were registered in the order backlog. On the one hand, several expressway projects contributed to an increase in the volume of orders on the books in Poland. On the other hand, this figure fell back, particularly in Russia and – from a previously high level – in Germany.

It added that large projects were also being worked off in Hungary, Chile and Slovakia.

In total, the order backlog stood at €13.76 billion on 30 September, 2015, which it said was a decline of 11% compared to 30 September, 2014.

Thomas Birtel, CEO, said, “We have set a course to increase our profitability in the medium term – and in 2015, these efforts have had a clearly positive impact on our financial results for the third time in a row.

“The results for the first nine months of this financial year give us reason to be optimistic that we will be coming one step closer to our goal of increasing the EBIT margin to 3% sustainably.”

He admitted that this good news might appear to be dampened by the fall of 11% in the company’s order backlog.

“Naturally, we are making an effort to maintain a constant pipeline of new orders. Our main goal, however, is to increase our profitability. Having a strong risk management also means opting against participation in certain projects due to risk considerations.”

Strabag’s higher revenue also resulted in improved earnings before interest, taxes, depreciation and amortisation (EBITDA) in the first nine months of 2015, rising 15% to €403.79 million.

The third quarter EBITDA grew by 4% to €279.96 million, it said, while the EBIT gained 7% to €184.23 million. It said net income after minorities had increased by 6% to €113.85 million.

The management board of Strabag said it continued to expect the output volume in the 2015 financial year to grow from €13.6 billion to €14.0 billion. The EBIT should increase to at least €300 million, it said.