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After the third quarter, Austrian construction giant Strabag still looks on track for the full year. Production should be 15,000 million euros in 2020, after 16,600 million euros the previous year, and the operating EBIT margin of at least 3.5 percent; In 2019 it was 3.8 percent. The company confirmed it on Thursday. From January to September, production fell 9 percent to 11.10 billion euros and the order book grew 7 percent to 18.96 billion euros.
The trend shown in recent quarters continued into the third quarter, explained CEO Thomas Birtel. The drop in production is in line with expectations (up to June it had been 10 percent) and the order book remains very high. “So we stick to the outlook for 2020,” Birtel said. At the end of August, Strabag SE raised its production forecast for this year from 14.4 to 15 billion euros. The order book had grown 6 percent in the first half of the previous year.
The drop in performance was essentially due to three factors, Strabag SE recalled: the service that was no longer available due to the contract with a major German client in the Property and Facilities Services area that expired in mid-2019, the temporary construction stops at the first lockdown of the coronavirus crisis in Austria in the spring and the processing and completion of tunnel construction projects in Chile. Regarding Covid-19, it was stated in the late August biannual report that a “second wave” would not catch him off guard, because it was clear: “It is not a short-term ghost and an easy return to normal before March. 2020. “
Currently it is said that with the slight increase in the order book, the processing of the main orders in the Americas region, in Hungary and Poland was offset by significant new orders or order extensions in the construction of tunnels in Great Britain and a significant increase in the order book in Germany. In particular, major projects in Germany enriched the portfolio in the quarter under review, including a large order for Deutsche Bahn and the award of the BAB 49 motorway project in Hesse in a public-private partnership (PPP).
With the lower performance of the construction company, the average number of employees also decreased, compared to the first nine months of 2019 by 4 percent to 74,169. The largest decrease was recorded in Germany (due to the aforementioned loss of a significant long-term order in the property and facilities services segment in the prior year), followed by a project-related reduction in the Middle East.
As usual, Strabag does not provide any absolute information on EBITDA, EBIT or earnings before taxes in the third quarter statement. In the first half of the year, earnings before interest, taxes, depreciation and amortization increased 2 percent to about 300 million euros in one year. Operating income fell 26 percent to 45 million euros, EBT to 31.6 (41.5) million euros. (apa)
