ACS profit tumbles
By Helen Wright15 November 2011
Despite reporting significant growth in turnover and order backlog, Spanish contractor Actividades de Construccion y Servicios (ACS) said its net profit for the nine months to 30 September, 2011, fell 35% year-on-year to €739 million.
The results were skewed by the company's 2010 sale of part of its stake in Spanish infrastructure group Abertis - a deal which boosted last year's nine-month net profit by €119.3 million, but added just €32 million to this year's figure.
In addition to the impact of lower income from this investment, the contractor also spent €1.1 billion during the period acquiring a majority stake in Germany's Hochtief, and was hit with a €76 million write-down, mainly as a result of troubles at Hochtief's Australian subsidiary, Leighton.
In addition, ACS has also spent €816 million since the start of June this year on consolidating Hochtief's debt.
Offsetting these expenses, ACS generated €1.5 billion by disposing of several renewable assets as well as transmission lines in Brazil and mining contracts in Australia.
In the third quarter, the company also agreed the sale of several concessional and renewable assets for a total value of €1.8 billion, but the deals are pending completion, which ACS said was expected in the last months of the year.
Significant construction gains
Meanwhile, the acquisition of Hochtief boosted ACS's turnover for the nine-month period significantly. Overall sales grew 62.1% year-on-year to €18.2 billion, with construction turnover accounting for €11.6 billion of the total - up 63% year-on-year. The construction division also turned a net profit of €197 million, up 25% compared to 2010.
And ACS's construction backlog stood at €46.4 billion at the end of September, representing a huge 337% increase year-on-year.
ACS said that Hochtief had contributed €7.4 billion to its overall sales figure, representing four months activity and helping ACS to grow its international sales to more than 77% of its construction total. Hochtief also contributed €37 billion to the construction order backlog.