Hochtief maintains improvement

30 April 2015

Hochtief is claiming a successful start to 2015, saying it had sustained the positive trend from last year with significantly increased profits and margins in the first quarter.

Chairman of the executive board Marcelino Fernández Verdes said, “Our figures show that we made the right decisions for sustained improvement, and that the strategic transformation is delivering positive results.”

Hochtief, whose major shareholder is Spanish-based ACS (Actividades de Construcción y Servicios), said its operational net profit increased by more than 40% in the first three months of 2015 to €60 million – when adjusted for one-off items such as disposals of activities and restructuring expenses. This was up from €42 million in the first quarter 12 months earlier.

It said its operational earnings before tax also increased, by 52% to €151 million. It said all three of its divisions – Americas, Asia Pacific and Europe – contributed to this growth and improved profitability.

Hochtief said it had reduced net debt by €500 million compared with a year ago and that cash flow from operations remained steady.

Its order backlog increased to €37.6 billion, which it said was a rise of 3% year-on-year. The increased order book for Europe and Americas, and a positive exchange rate effect was said to compensate for the impact of tighter bidding discipline at CIMIC – its Australian subsidiary formerly called Leighton Holdings – and market conditions.

In the Asia Pacific division, Hochtief achieved financial close on the divestment of 50% of the service activities in March and for the divestment of John Holland in April.

Fernández Verdes said, “We successfully finished the first phase of the transformation in Australia.”

Asia Pacific’s operational net profit went up by 27% to €46 million, and margins increased by approximately 20%.

The company said that restructuring in the Europe division was showing favourable results. The division recorded an operational net profit of €0.3 million in the first quarter, compared to the same period in 2014 when there was an operational loss of €6 million. The company said new orders more than tripled to €1 billion, driven by the infrastructure business.

The Americas division also showed further improvement, said Hochtief. The division increased the operational net profit by 30% to €24 million, it said.

Hochtief said its outlook for the group for 2015 remained unchanged. It said it expected operational net profit of between €220 million and €260 million, representing an increase of 15% to 35%.