Interim Report January–March 2012
STRABAG SE REPORTS RECORD ORDER BACKLOG AND AS EXPECTED HIGHER LOSS IN Q1/2012- New record high for order backlog: € 15.7 billion
- Output volume more or less stable at € 2.3 billion
- EBIT lower than in Q1/11, burdened by raw materials business, among others
- Cash-flow from operating activities improved by 84 %
- Outlook confirmed: 2012 EBIT of over € 300 million further described as “more than ambitious”
Vienna, 31 May 2012
Today, Thursday, STRABAG SE, Central and Eastern Europe’s largest construction company, announced its figures for the first quarter 2012. As expected, the loss was higher than in last year’s first quarter; at the same time, STRABAG posted a record high in the order backlog. The company confirmed its outlook on the full year.
“At the end of April, we had described our planning for the earnings before interest and taxes (EBIT) of over € 300 million as “more than ambitious”. The past few weeks have confirmed that we must proceed prudently regarding our assessment of the 2012 business development. I therefore repeat, how ambitious our plans are in light of the current situation: As in the 2011 financial year, the lack of infrastructure investments by the public sector in Europe will continue to have a negative impact on the Transportation Infrastructures segment. A further burden will likely be the weakened demand for construction in Poland after the European Football Championship. On the other hand, we expect to see a still solid business in the German building construction and civil engineering segment as well as improved results in niche markets”, commented STRABAG SE CEO Hans Peter Haselsteiner.
Output volume and revenue
The STRABAG Group’s output volume in the first quarter of 2012 fell slightly by 2 % to € 2,262.54 million. The largest reduction was registered in Poland due to the end of the construction boom in that country. The expansion in Scandinavia, in comparison, is beginning to bear fruit. The output volume also was up in Romania and in the RANC region (Russia and the neighbouring countries). The consolidated group revenue in the first three months of the financial year amounted to € 2,192.65 million, nearly stable relative to the previous year (-1 %).
Order backlog
The order backlog reached a new record high of € 15,688.29 million at the end of the first quarter 2012. While the high order backlog of the previous year from the large infrastructure projects in Poland was continuously worked off and transformed into output, STRABAG was awarded at least two new large projects at the beginning of 2012: the Pedemontana Lombarda project to build a bypass around the city of Milan, Italy, added about € 1 billion to the STRABAG order books, and in Germany a STRABAG subsidiary was awarded the tender for a part of the works on the municipal Stuttgart 21 railway station.
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. As a result of the seasonal effects, a quarterly comparison makes little sense.
The earnings before interest, taxes, depreciation and amortisation (EBITDA) fell from € -59.80 million to € -74.34 million in the first quarter of 2012. This development was influenced in part by a stronger loss of associates resulting from the inclusion of an equity investment in a cement company in Central and Eastern Europe. The depreciation and amortisation rose by 6 % to € 90.33 million. The earnings before interest and taxes (EBIT) was down 13 % to € -164.66 million.
At € -34.52 million, the interest income was significantly more negative than in the previous year’s first three months (€ -3.21 million) as this figure contained currency exchange rate differences in the amount of € -31.4 million compared to exchange rate gains of € 3.2 million in the first quarter of 2011. This led to a profit before tax of € -199.18 million after € -148.59 million the year before. Accordingly, the income tax was in positive territory with € 40.04 million and thus provided some relief. Below the line, this left a 36 % higher negative – this is usual in the first quarter – profit after tax of € -159.14 million. The minority-interest shareholders helped bear a loss of € 8.58 million, resulting in a net income after minorities of € -150.55 million.
Due to the ongoing share buyback programme, the number of weighted outstanding shares was down from 114,000,000 to 104,907,599. The result per share thus amounted to € -1.44 after € -1.03 in the first quarter of the previous year.
Financial position and cash-flows
The balance sheet total reached € 10,079.92 million, 3 % lower than at the end of 2011. The lower total results from the typical first-quarter effect of reduced current trade receivables; in this case, a particular influence was the completion of a motorway project in Denmark. The equity ratio showed little change, settling at 30.4 % after 30.3 % on 31 December 2011. The net cash position fell from € 267.81 million to € 56.16 million in response to seasonal losses and capital expenditures.
The cash-flow from earnings stood at € -131.26 million, 68 % deeper in negative territory than in the same quarter last year. Thanks to the strong reduction of trade receivables, in particular involving the mentioned large-scale project in Denmark, the cash-flow from operating activities improved by 84 % to € -47.57 million. Investments in property, plant and equipment and in intangible assets as well as enterprise acquisitions were at about the same level as in the previous year, leading to only a slight change in the cash-flow from investing activities from € -119.74 million in the first quarter of 2011 to € -107.31 million in 2012. The cash-flow from financing activities also showed no major changes: as the bank borrowings were reduced more or less by the same amount as the raising of a bonded loan, the cash-flow here stood at € 19.81 million after € 28.42 million in the first quarter the year before.
Employees
Along with the output volume, the number of employees also fell by 2 % to 70,767 employees. The trends were extremely varied due to the quite different framework conditions in the construction sector in the individual regions.