Austrian contractor 945 Strabag reports healthy earnings before interest and taxes (EBIT) of €207 million in 2012. This figure beats the firm’s own expectations and the expectations of the market. Net income after minorities stood at €61 million, showing an expected considerable decrease of 66.67% compared to the year before. “An output volume of €14 billion in 2012 – that’s nothing to complain about. With €13.2 billion, the end-of-the-year order backlog is also nearly exactly at the pre-crisis level of 2008, suggesting steady and stable business development in 2013. Certainly, our earnings are disappointing. 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,” said Hans Peter Haselsteiner, CEO of STRABAG.
The output volume of €14 billion, with a decrease of just 2 %, remained practically at the high level of the previous year. The largest reduction was registered in Poland due to the end of the construction boom in that country. Declines in several countries in Eastern Europe were countered by increases in Germany and in Romania.
Because of 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 of joint ventures, the earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 18% to €608 million. Depreciation sank by 3%. This led to a reduction in EBIT of 38% to €207 million and an EBIT margin of 1.6% compared with 2.4% last year.
While positive exchange rate differences amounting to €37 million had still been registered in 2011, the net interest income in the past financial year now contained negative foreign currency effects of €12 million. This resulted in a negative net interest income. The net income after minorities for 2012 stood at €61 million, 69 % below the level of the previous year. The balance sheet total of STRABAG remained stable at €10.1 billion. The already high equity ratio improved from 30.3 % to 31.2 %.
Due to the 28 % decline of the cash flow from profits and the somewhat stronger build-up of working capital, the cash flow from operating activities in the past financial year fell 46% to €269 million. In the previous year, the investment for an interest in a cement plant had still affected the cash flow from investing activities. The absence of this investment in the past financial year, and the cautious attitude regarding enterprise acquisitions, let the cash flow from investing activities fall by 27% to -€447 million. The cash flow from financing activities, which amounted to -€176 million, was defined by a significant repayment of bank borrowings related to a motorway concession project in Denmark that was completed and transferred to the client.
The company claims its successful strategy of diversification means that the lack of public-sector infrastructure investments in Europe have not resulted in any major declines in the its output. Based on the balanced business in terms of regions and segments, STRABAG expects the output for the 2013 financial year to remain unchanged over 2012 at €14 billion. A further, expected reduction in Poland should be countered by increases in tunnelling, in the international business and in building construction in Austria.
While the management board of STRABAG SE 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 EBIT grow to at least €260 million in the 2013 financial year. This corresponds to an increase of at least 25%.
The output volume of €14 billion, with a decrease of just 2 %, remained practically at the high level of the previous year. The largest reduction was registered in Poland due to the end of the construction boom in that country. Declines in several countries in Eastern Europe were countered by increases in Germany and in Romania.
Because of 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 of joint ventures, the earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 18% to €608 million. Depreciation sank by 3%. This led to a reduction in EBIT of 38% to €207 million and an EBIT margin of 1.6% compared with 2.4% last year.
While positive exchange rate differences amounting to €37 million had still been registered in 2011, the net interest income in the past financial year now contained negative foreign currency effects of €12 million. This resulted in a negative net interest income. The net income after minorities for 2012 stood at €61 million, 69 % below the level of the previous year. The balance sheet total of STRABAG remained stable at €10.1 billion. The already high equity ratio improved from 30.3 % to 31.2 %.
Due to the 28 % decline of the cash flow from profits and the somewhat stronger build-up of working capital, the cash flow from operating activities in the past financial year fell 46% to €269 million. In the previous year, the investment for an interest in a cement plant had still affected the cash flow from investing activities. The absence of this investment in the past financial year, and the cautious attitude regarding enterprise acquisitions, let the cash flow from investing activities fall by 27% to -€447 million. The cash flow from financing activities, which amounted to -€176 million, was defined by a significant repayment of bank borrowings related to a motorway concession project in Denmark that was completed and transferred to the client.
The company claims its successful strategy of diversification means that the lack of public-sector infrastructure investments in Europe have not resulted in any major declines in the its output. Based on the balanced business in terms of regions and segments, STRABAG expects the output for the 2013 financial year to remain unchanged over 2012 at €14 billion. A further, expected reduction in Poland should be countered by increases in tunnelling, in the international business and in building construction in Austria.
While the management board of STRABAG SE 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 EBIT grow to at least €260 million in the 2013 financial year. This corresponds to an increase of at least 25%.
