Profit up at Hochtief

Operational net profit at German-based contractor Hochtief increased by 25% year-on-year in the first half of 2016 to €160 million, while second quarter figures were up 29% to €88 million.

The company said its nominal net profit at €140 million was 30% higher than the first half of 2015.

Its order backlog of €38.8 billion was up by 6% since the end of 2015, with new orders up 12% to €13.2 billion year-on-year.

Chairman of the executive board Marcelino Fernández Verdes said, “We are consistently on track and have a strong financial base enabling us to pursue further growth.”

The group’s operational net profit was reported to be up by a “significant” 25% in the first six months of 2016 to €160 million, compared to €129 million a year earlier.

Hochtief said that nominal net profit went up by 30% to €140 million, while operational profit before tax increased by 4% to €328 million.

The group reported a rise in operational pre-tax profit to 3.5%, which it said was a result of its focus on tight cost control, financial cost reduction, improved project bidding and risk management.

It added that all three of its divisions – Americas, Asia Pacific and Europe –contributed to this increase.

The order backlog was said to have grown by 6% since the beginning of the year, to €38.8 billion.

New orders included a billion-dollar contract to build a stadium in Los Angeles, US, rail projects in the UK and Australia, a mining contract in Indonesia, and the Mercedes Plaza in Berlin, Germany.

Americas increased new orders by 34% to €7.6 billion – which Hochtief said was a record figure for the first half of any year. Operational profit before tax climbed 33% to €113 million.

In Asia Pacific, the group’s CIMIC company improved its pre-tax profit margin to 6.1% and sales rose in the second quarter.

Europe was said to have kept up the positive trend, generating operational net profit of €11 million compared to a figure for the first half of 2015 of €1 million.

For 2016, Hochtief said it expected operational net profit of between €300 million and €360 million, representing an increase of approximately 15% to 35% year-on-year. The 2015 like-for-like operational net profit figure was €265 million.