Strabag revenues and profits rise

02 December 2008

Strabag in Moscow

Strabag recorded third quarter sales of € 3,5 billion, up +26% on the € 2,8 billion reported for the same period in 2007. Furthermore, pre-tax profit for the quarter of € 177 million represented a +18% increase on the € 150 million reported for the third quarter of last year.

The building construction and civil engineering segment of the Group recorded third quarter sales of € 1,6 billion, up +19% on the € 1,2 billion reported for the quarter in 2007. Profits for the segment rose +83,5% from € 40 million in 2007 to € 74 million in the third quarter of 2008.

For the first nine months the order backlog for the segment stood at € 7,5 billion said a company statement. The backlog in Central and Eastern Europe was up +46%, attributable to a +123% increase in Poland, up to € 277 million, and a +76% increase in Russia, up to € 2 billion, said the statement.

In the transportation infrastructure segment of the Group, third quarter sales of € 1,7 billion represented a +20% increase on the € 1,4 billion reported for the corresponding quarter last year. Pre-tax profits for the segment also rose by +10% from € 95 million in 2007 to € 105 million in the third quarter of 2008.

A company statement said that growth in the segment was due to a +43% growth in German markets, up to € 1,7 billion, and a +26% growth in the Czech Republic, up to € 540 million. “The growth in Germany reflects the acquisition of F. Kirchhoff, the market leader in the transportation infrastructure business in the German state of Baden-Wurttemberg,” said a company spokesperson.

“The acquisition allows Strabag to tap a regional market in which it had not previously had a widespread presence,” continued the spokesperson, “furthermore; Kirchhoff has an important international presence, particularly in the transport infrastructure segment in Poland.”

In the special division and concessions segment of Strabag Group revenues increased +171% from € 127 million in the third quarter of 2007 to € 347 million in the quarter this year. Despite increased revenues, pre-tax profits for the quarter dropped -119% to a € 3 million loss for the quarter, against a € 16 million profit in 2007.

A company spokeswoman said, “This segment includes large tunnelling and infrastructure projects and we had two projects that required measures that incurred additional cost following incorrect soil research figures. Our client has yet to settle the additional costs and this is reflected in our profits for the segment,” confirmed the spokeswoman.

Dr Hans Peter Haselsteiner, Strabag chairman, said of the group’s third quarter performance, “The order backlog currently amounts to nearly € 14 billion. This represents a comfortable reserve for the remaining months of 2008 as well as for 2009.

“The management is in constant contact with our clients to guarantee the order backlog remains stable and to ensure that no major projects in process fail due to lack of financing. I expect that the current business environment will have only a small effect on our Group in 2008 and 2009. From 2010, we will see which construction companies responded quickly enough to the financial crisis. I am sure that Strabag will be one of them.”