Construction drags on Bilfinger results

Contractor Bilfinger has reported total output volume of €8.51 billion for 2013, down 1% compared to 2012.

In its preliminary full-year results for last year, adjusted earnings before interest, taxes and amortisation (EBITA) grew 6% year-on-year to €409 million.

However, the solid group results masked declines in the company’s construction division, where output volume fell 26% to €1.04 billion compared to 2012. The division’s adjusted EBITA plummeted 96% year-on-year to €1 million.

Bilfinger said it had not been possible in the fourth quarter to reach an agreement on outstanding claims relating to completed road construction projects in Poland. The contractor also highlighted the fact that it sold its loss-making German road construction business during 2013.

Looking ahead to 2014, Bilfinger said it expected to report “a comparable figure” in terms of output volume in construction. It added that earnings were forecast to improve “significantly” due to an expected turnaround in Poland and the fact that it sold its German roadbuilding arm.

It said the construction EBITA margin, however, was not expected to reach its target figure in 2014.

Group-wide the outlook for 2014 was more positive. Bilfinger said total output volume was expected to increase to at least €9 billion in 2014. It said adjusted EBITA was forecast to increase “significantly”, thanks, in part, to ongoing cost reduction measures.

The contractor said, “With the exception of construction, organic growth is expected in all business segments with the acquisitions already made also contributing to the increase.”