The first quarter of 2011 was marked by the earnings collapse at Hochtief Asia Pacific. Subsidiary Leighton had significantly reduced its figures in April and Hochtief had to scale back its own guidance in April as a result. “Despite an outstanding performance in the first quarter, the Hochtief Americas, Hochtief Concessions, and Hochtief Europe divisions could not compensate this development,” said the company.
Key figures for the first quarter of 2011 include new orders totalling €5.41bn (€4.72bn), 56.9% percent higher than the comparative figure for the previous year. The exchange rate adjusted figure is 48%.
The increase was accounted for by the Hochtief Asia Pacific division, which secured many major new contracts. Work done came to €5.10bn as of 31 March, an increase of 7.3% over the previous year, or 1.9% on an exchange rate adjusted basis. The strongest contribution to this came from the Hochtief Asia Pacific and Hochtief Europe divisions. The prior-year figure was comfortably exceeded in Germany as a result of strong performance by the Hochtief Europe division, with growth of 23.8%.
The order backlog stood at €45.61bn, an improvement of 24.9% (exchange rate adjusted 20.1%) on the comparative figure for the previous year. This is equivalent to a forward order book of more than two years for Hochtief.
Operating earnings (EBITA) dropped steeply in the first quarter of 2011, with a negative figure of €404.3m marking a sharp deterioration from last year’s positive figure of €152m. This mainly related to a substantial decrease in earnings at Leighton. Notable factors in that decrease are an expected loss on the AirportLink road project in Brisbane and a significant reduction in expected profit on the Victorian Desalination Plant project near Melbourne. Late payments in the Gulf region meant that Leighton’s management has also decided to recognise an additional €88 million in provisioning for outstanding receivables at the Al Habtoor Leighton Group.
Hochtief Americas more than doubled operating earnings compared with the previous year’s quarter and Hochtief Concessions had a marked increase in operating earnings. The improvement resulted from reversal of a provision that was no longer needed at an airport, a cost refund on a road project, and stronger net income from participating interests due to overall growth in passenger numbers.
For the current fiscal year, Hochtief continues to expect that new orders, work done, and the order backlog will normalise at a level below the record figures of 2010 and that sales will be broadly on a par with 2010.
Projections for 2012 and 2013 remain unchanged: for 2012, Hochtief anticipates a pretax profit of approximately €1bn and consolidated net profit of some €500m. In 2013, it plans to achieve pretax profit in excess of €1bn and consolidated net profit of around €450m.
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