Bam announces €75 million project losses

Bam has said problems with two projects, one in Germany and one in the UK, will generate losses of €75 million. As a result, it said it will accelerate plans to cut costs and improve its financial strength.

One of the problem projects is described as a large civil engineering scheme in Germany where measures to deal with adverse ground conditions and keep the project on track have pushed up costs for Bam. The second project is a mid-sized civil engineering scheme in the UK where poor ground conditions and bad weather have had an impact.

Bam Executive Board Chairman Nico de Vries said, “I am extremely disappointed to have to announce these negative developments. Our underlying strategy is the right one, but out delivery has not been good enough. It is fully clear to the Executive Board that Bam must act urgently and decisively to get all parts of the group to contribute positively to our results. This is why we are taking the actions being announced today.”

Among the measures Bam is taking at a corporate level is a new cost reduction programme to streamline its operating companies, which is designed to deliver annual savings of at least € 100 million by the end of 2015.

The company said it was also looking to increase its working capital by at least €300 million. Among the measures to achieve this will be continued divestments of Bam’s property portfolio. The company said it was also investigating other asset sales.