ACS’ German subsidiary Hochtief returns to profit

The first six months of 2013 went well for Hochtief. The positive trend in earnings performance since the start of the year has continued. Operating earnings came to EUR 586.9 million in the period January to June 2013 (H1 2012: EUR 183.8 million). The very substantial rise is due to improved operating earnings in all divisions and also reflects completion of the sale of Leighton’s telecommunications business.

This transaction had a EUR 165 million positive impact on earnings. Hochtief likewise improved profit before taxes to EUR 451.5 million (H1 2012: EUR 72.7 million). Excluding one-off items – excluding the effect of the sale of the Leighton telecoms business just mentioned and other effects, initial expenditure on restructuring in the Hochtief Europe and Hochtief Americas divisions, and disposal-related costs in the Hochtief Europe division – Hochtief generated profit before taxes of EUR 313.5 million in the first six months.

Consolidated net profit amounted to EUR 126.2 million in the first half of 2013 (excluding one-off items: EUR 100.2 million). In the prior-year period, substantial impacts on earnings had resulted in a consolidated net loss of EUR 50.6 million.

“The strategy implementation continues as planned accompanied by the disposal of non-core activities,” the company–under Spanish ACS’ control–said in a press release. Leighton thus successfully finalized the sale of its telecommunications business in the second quarter. Both the airports and the services transactions are expected to close by no later than the year-end. Restructuring of the Europe business continued to take shape and will bolster the competitiveness of Hochtief for the long term.

“We are well on course to implement our strategy and position Hochtief as a global infrastructure group. This new, strong company, creating sustained value, will benefit our shareholders considerably,” said Hochtief CEO Marcelino Fernández Verdes, commenting on the developments.

The company’s progress is reflected in its earnings performance. All divisions improved operating earnings. With an order backlog of over EUR 45 billion, the Group also has the equivalent of 18 months in forward orders and every cause to look ahead to the remainder of the fiscal year with unchanged optimism. Hochtief accordingly confirms its guidance for fiscal 2013, which already no longer included any earnings contribution from Hochtief AirPort and now also no longer includes any contribution from the Service Solutions business of Hochtief Solutions sold.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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