Interim Report January – March 2010
STRABAG SE with record order backlog and lower winter loss in the first quarter 2010- Severe winter: output volume fell by 16 % in Q1/2010 to € 1,837.38 million
- EBITDA (€ -46.02 million) and EBIT (€ -149.89 million) less negative due to improved winter cost management and special item relating to acquisition
- Result per share improved by 9 % from € -1.13 to € -1.03
- Order backlog at record high: € 15.6 billion – infrastructure projects in Poland
- Outlook unchanged: output volume and results stable in 2010
Vienna, 31 May 2010
STRABAG SE, Central and Eastern Europe’s largest construction company, concluded the first quarter 2010 with a record order backlog and a lower winter loss. “The first quarter of 2010 was characterised by a long and hard winter, resulting in double-digit revenue decline. As is the case every first quarter, we have to post a loss this year as well. Thanks, however, to the improved cost management and positive special items related to the acquisition of a higher stake in Czech railway construction company Viamont DSP a.s., this was lower than in the same quarter the previous year. I see no reason to change my outlook for the full year 2010 from the end of April. My management board colleagues and I continue to expect to close the financial year at the previous year’s levels in terms of both output volume as well as earnings”, Hans Peter Haselsteiner, CEO of STRABAG SE, commented on the figures.
Output Volume and Revenue
The unfavourable weather conditions at the beginning of the year and the completion of several large projects in the Middle East and in Russia led to a 16 % reduction in the output volume to € 1,837.38 million in the first quarter of 2010. The consolidated group revenue reached € 1,788.45 million in the first three months of the 2010 financial year, compared to € 2,082.33 million the year before (-14 %). While the output volume in the Transportation Infrastructures segment was only slightly below the usual low amount in the winter quarter, the Building Construction & Civil Engineering segment posted negative output growth in the double-digit percentages.
Order backlog
The order backlog reached the record amount of € 15,634.71 million, due for the most part to the large infrastructure projects acquired in Poland last year. In Poland alone, the order backlog grew by more than € 1.8 billion over the previous year to € 2.9 billion. These projects were also responsible for a shift in the relative weight of the segments: the contribution from the Building Construction & Civil Engineering segment to the group order backlog fell from 43 % to 38 %, while the contribution from Transportation Infrastructures grew from 32 % to 36 %.
Financial performance
The limited capacity for construction in winter results in significant seasonal effects on the development of earnings and other financial figures of STRABAG SE. The first two quarters of the year typically have a negative effect on results, which is then overcompensated by results in the second half of the year.
Expenses for raw materials, consumables and services could be lowered in the past three months from 71 % to 68 % of the revenue. As a result, the EBITDA (earnings before interest, taxes, depreciation and amortisation) was significantly less negative, amounting to € -46.02 million compared to € -66.31 million the previous year. The EBITDA margin improved from -3.2 % to -2.6 %.
The EBITDA contains an acquisition-related write-up through profit or loss of Czech railway construction company Viamont DSP a.s. of € 24.60 million. At the same time a charge for goodwill impairment in the amount of € 14.00 million was made, which increased the depreciation and amortisation by 20 %. The EBIT (earnings before interest and taxes) amounted to € -149.89 million, only 2 % less negative than in the same quarter the year before. The EBIT margin changed from -7.3 % to -8.4 %.
With € -14.51 million, the net interest income in the first three months was less negative than in the same period the previous year (€ -26.36 million). While interests remained more or less unchanged, exchange rate decreases no longer had the same effect. The profit before tax was € -164.40 million, compared to € -179.03 million in Q1/2009. The negative net income was limited by 9 % at € -128.65 million. After minorities, the result is a 9 % decrease in consolidated losses to € -117.83 million and a result per share of € -1.03, compared to € -1.13 in the first quarter last year. Without the special items from the increase in the stake in Viamont by 50 % to 100 %, the net income attributable to equity holders of the parent and the result per share would have been at around the previous year’s level.
Financial position and cash-flows
The balance sheet total fell from € 9,613.59 million on 31 December 2009 to € 9,215.32 million, mostly due to the reduction of current trade receivables and the repayment of current liabilities. The equity ratio remained stable with 32.4 % compared to 32.2 %. The net cash position in the amount of € 596.23 million at the end of 2009 sank to € 381.27 million on 31 March 2010.
Due to the improved consolidated net result, the resulting cash-flow from profits and a continued good working capital management, the cash-flow from operating activities reached € -117.35 million, significantly less negative than in the first quarter of the year before (€ -189.91 million). Several large capital expenditures in railway construction, and the increase in the stake of Czech railway construction company Viamont DSP a.s., pushed the cash-flow from investing activities up from € -58.62 million to € -115.44 million. In comparison, the cash-flow from financing activities fell by more than half to € 13.82 million and is almost exclusively related to the bank borrowings.
Employees
STRABAG responded to the economic situation by introducing workforce reduction in several countries – for example in the Czech Republic, Hungary and the Balkan states. This, coupled with the lower output volume in winter, resulted in a drop in employee numbers by 7 % to 68,318. Only in Poland considerable growth in the STRABAG workforce could be seen, with employee numbers growing by over 700.
Investor and analyst conference call
The investor and analyst conference call will be recorded and the replay will be available as of today, 3.00 p.m., until 5 June 2010. In order to listen to the replay, please dial one of these numbers followed by the code 5 1 8 3 6 #:
+49 (0) 69 71 04 88 70 (Germany)
+44 (0) 12 12 60 48 61 (UK)
+1 (1) 866 268 19 47 (US)
+43 (0) 125 302 14 00 (Austria)
+43 (0) 800 10 25 19 70 (Austria toll-free)