First quarter 2006: HOCHTIEF fully on target
Essen, Germany – First quarter 2006: HOCHTIEF fully on target, outlook good for entire year
- Marked growth in external sales and work done
- Profit before taxes up on adjusted figures for prior-year quarter
- Forecast for 2006 reaffirmed
HOCHTIEF has had a successful first quarter 2006, with both orders and earnings growth as planned. According to Dr. Hans-Peter Keitel, Chairman of the HOCHTIEF Executive Board, the Group is making excellent progress: "We have once again delivered the operating success to underpin our strategy. The capital market is rewarding this success." The key goal, says Keitel, remains to further enhance HOCHTIEF’s operating earnings power: "This is the benchmark for every decision taken in the Group." Confirmed by the strong first quarter, HOCHTIEF has reiterated its forecast for fiscal 2006 and expects further growth in consolidated net profit.
First quarter 2006 operating earnings, at EUR 47.4 million, were almost on a par with the adjusted Q1 2005 figure of EUR 50.1 million excluding exceptional items. Profit before taxes was EUR 48.9 million, up 17.5 percent from the prior-year quarter (Q1 2005 excluding exceptional items: EUR 41.6 million). Consolidated net profit came to EUR 7.8 million, an improvement of 4.3 percent (Q1 2005 excluding exceptional items: EUR 7.4 million).
New orders totaled EUR 3.34 billion, an increase of 18.9 percent from the prior year (Q1 2005: EUR 2.81 billion). Work done rose sharply to EUR 3.66 billion, exceeding the comparative figure for 2005 by 24.1 percent (Q1 2005: EUR 2.95 billion). The order backlog swelled accordingly by 12 percent to set another new record at EUR 21.56 billion (Q1 2005: EUR 19.25 billion). HOCHTIEF generated external sales of EUR 3.42 billion in the first quarter of 2006 – an increase of 31.5 percent compared with the prior year (Q1 2005: EUR 2.6 billion).
All divisions contributed to the Group’s positive results. Notable successes were scored in the public-private partnership sector. In North Ayrshire, Scotland, HOCHTIEF secured a build-finance-operate PPP contract for four schools, worth a total of EUR 550 million over a term of 30 years. The HOCHTIEF Construction Services Asia Pacific division continued its dynamic growth, with subsidiary Leighton acquiring 15 mining contracts from Henry Walker Eltin Group Limited in Australia and thus a substantial market share in iron ore extraction. The European construction business was set back by an exceptionally harsh winter.
The Group’s future business outlook is positive. Assuming there will be no crisis-scale slowdown in the economy, no turbulence affecting the international financial markets and no worsening of the situation in political flashpoints, HOCHTIEF reaffirms its forecast for the 2006 fiscal year:
- New orders of the same magnitude as the 2004 and 2005 records.
- By HOCHTIEF’s estimation, an order backlog of about EUR 21 billion by the end of 2006 – again of similar magnitude to the 2005 record.
- Group sales of EUR 13-14 billion.
- With the Group’s operating earnings power further improving during 2006, profit before taxes above the previous year’s pretax profit adjusted for effects of the investment partnership.
- In line with the extra earnings power in HOCHTIEF’s operating business, further growth in consolidated net profit. In 2006, the Group will progress substantially closer to its medium-term target of EUR 100 million.