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Press release

PORR AG: Solid first half-year 2018

  • Strong growth driven by large-scale projects, output climbs by 22%
  • EBT of EUR 6.6m and an increase of around 66%
  • Order backlog reaches EUR 6.5 bn (+14.6%)
  • Guidance for 2018 confirmed

 

Vienna, 29 August 2018 – PORR AG continued its positive momentum in the second quarter of 2018. It once again improved both production output and earnings before taxes (EBT) compared to the previous year. Production output of around EUR 2.5 bn increased by 22.0% in the first half of 2018. EBT totalled EUR 6.6m, a rise of 66%. The order backlog also grew and maintained its high level at EUR 6.5 bn. The outlook for the year 2018 is thereby confirmed.

“PORR has delivered a solid second quarter. Strategically we are on the right track and we are working on making PORR even stronger”, said Karl-Heinz Strauss, CEO of PORR. “The realignment in Germany is part of this. The increasingly fierce competitive environment shows that our unwavering focus is correct and necessary. We remain committed to our long-term prospects”. 

Earnings, output and orders

In the second quarter of 2018 PORR managed to build on its positive start to the year and increase production output to EUR 2,458m for the first half-year. This represents year-on-year growth of 22.0% or EUR 443m. Every segment made a positive contribution to the increase in output, with PORR achieving particularly strong growth in Austria, Germany and Poland. EBITDA rose by 27.2% to EUR 72.4m. EBT in the first six months increased to EUR 6.6m, achieving an increase of 66.4%. This corresponds to an EBT margin of 0.3% (previous year: 0.2%). The profit for the period stood at EUR 5.6m (previous year: EUR 2.9m). This meant that earnings per share of EUR 0.14 were significantly higher than in the previous year.

At EUR 6.5 bn, the order backlog was up by 14.6% year-on-year. This high level allows the company to take a highly selective approach to acquiring new projects. This led to a decrease in the order intake, mirroring that of the first quarter, of around 10.0% to EUR 2,621m. Numerous large-scale projects such as the FAIR accelerator complex in Germany, two major construction phases in Poland – the S6 expressway Bozepole-Luzino and the design-build tender for the 18km-long bypass Nowe Miasto Lubawskie – as well as the Franklin Tower in Switzerland, additional projects in industrial construction and orders in office and residential construction form a stable basis for the future. PORR also remains active in Qatar. Current orders are fully on track and will be completed as planned, while additional projects such as the Stormwater Tunnel in Dubai and the Musaimeer Pumping Station in Qatar have secured capacity utilisation for the coming years. After the end of the reporting period, the order for the Brenner Base Tunnel – the largest tunnelling tender in the history of Austria was finally secured. The lot has a length of around 18km corresponding to a proportionate order value of EUR 483m. 

In Germany the first decisive measures for the transformation were implemented in May. Activities in building construction have been bundled based on the principle of regions. Four strong regional centres will manage PORR’s German building construction in the future: East (via Berlin), South (via Munich), North (via Hamburg), and West (covered by PORR Oevermann). The concentration on regions allows markets to be cultivated far more efficiently in addition to securing more streamlined management structures. Duplication will be avoided, while know-how will be bundled and synergies transferred. Germany is and will remain the second most important market for PORR. Here PORR will also continue to invest in order to further strengthen its market position.

Balance sheet and cash flows

At 30 June 2018 the Group’s total assets stood at around EUR 3.0 bn. Net debt rose to EUR 413.8m due to seasonal factors and the expansion of business activities. The issue of a hybrid bond (EUR 123.5m) in the previous year had a contrasting effect. The equity ratio amounted to 18.6%, mainly because of the dividend payout and the increase in total assets. Cash flow from operating activities performed well and was significantly better than in the same period of 2017, rising by EUR 157.7m to EUR -181.0m. Cash flow from investing activities of EUR -17.5m also saw a significant improvement. The previous year’s value was affected by the one-off impacts of the acquisitions concluded in 2017 and current financial investments. Cash and cash equivalents totalled EUR 122.1m.

Outlook 2018

Dynamic growth in demand is continuing in the European construction sector, as reflected in the high order backlogs in the construction industry and the consistent rise in employment figures. That said, the competitive environment remains challenging. Rising prices for land and construction, subcontractor shortfalls, the shortage of skilled labour and the new tariff increases are having a severe impact on the market players and dampening expectations. This holds true for every one of PORR’s home markets. 

Assuming a stable economic environment and on the basis of the high order backlog, the Executive Board forecasts production output of at least EUR 5 bn in 2018. This represents an increase of around 5.5% against 2017. This forecast is, however, subject to a significant fluctuation range typical to the industry in light of the highly dynamic nature of the construction market and seasonal factors.

For enquiries, please contact:

Karl-Heinz Strauss
CEO
PORR AG
T +43 50 626-1001
M +43 664 626-1001
comms@porr-group.com

Press contact:
Sandra C. Bauer
Head of Corporate Communications . Corporate Spokesperson
PORR AG
M +43 664 626-3338
sandra.bauer@porr.at

IR contact:
Milena Ioveva
Head of Investor Relations and Strategy
PORR AG
T +43 50 626-1763
M +43 664 626-1763
milena.ioveva@porr.at

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