Strong operational earnings growth (+35%) in H1 2015
- Operational net profit increased by 35% to EUR 129 million, compared with EUR 95 million in H1 2014 (nominal: EUR 108 million, +7%)
- Operational EBT margin rises from 2.2% to 2.9%
- Earnings improve across all divisions
Robust order book at over EUR 37 billion
- New orders up 16% in H1 2015
- Strong new order intake at EUR 7.1 billion in Q2 2015
Significant cash flow improvement, over EUR 430 million yoy
- Over EUR 100 million of operating cash inflow in H1 2015 vs. EUR 332 million outflow in H1 2014
- Cash flow from operations turns positive in H1 for the first time in several years
Net cash position (EUR 133 million) improved by EUR 1.3 billion yoy
HOCHTIEF Group guidance for 2015 confirmed
HOCHTIEF achieved a substantial improvement in profits, margins and cash flow in the first half of 2015 and showed a strong new order intake in Q2 2015. “We are increasingly benefiting from the results of the strategic transformation,” said Chairman of the Executive Board Marcelino Fernández Verdes.
Adjusted for one-off items (such as divestments and restructuring expenses), operational net profit was up by a significant 35% in the first six months of 2015 to EUR 129 million (H1 2014: EUR 95 million). Operational earnings before tax (EBT) also rose strongly, by 36% to EUR 314 million. Nominal results (including one-off items) showed an increase of 61% in profit before tax to EUR 285 million, and a 7% improvement for net profit to EUR 108 million. All three divisions - Americas, Asia Pacific, and Europe - contributed to this improvement. The Group’s operational EBT margin rose by 70 basis points to 2.9%.
The Group made major progress improving cash flows: Cash flow from operations was positive in H1 for the first time in several years. Based particularly on the good performance of HOCHTIEF Asia Pacific, HOCHTIEF generated an operating cash inflow of EUR 104 million, compared with a cash outflow of EUR 332 million in the first half of 2014. HOCHTIEF’s net cash position of over EUR 130 million marks an improvement of EUR 1.3 billion year-on-year. Once again, this is an achievement to which all divisions contributed.
In the second quarter of 2015, the Group recorded a significantly higher new order intake of EUR 7.1 billion, taking the total new orders in H1 to more than EUR 11.9 billion, up 16% year-on-year. The order backlog remained robust at EUR 37.2 billion, representing a solid forward order book.
In particular, CIMIC contributed to the positive trend in Group orders in the second quarter of 2015. "The solid figures from CIMIC show that the transformation is having a positive effect," explained Chairman of the Executive Board Marcelino Fernández Verdes. The new contract awards include the construction and extension of highways in Sydney and Melbourne. CIMIC secured its first contract in South America, operating a copper mine in Chile. In addition, CIMIC recently won the contract to build a boundary control point on the border between Hong Kong and China worth a total of AUD 1.2 billion.
The HOCHTIEF Americas division also secured some important contracts. Our U.S. civil engineering company Flatiron will build the first high-speed rail link in the USA, between Los Angeles and San Francisco. Together with Flatiron and other partners, HOCHTIEF PPP Solutions is to build and operate a bridge over the St. Lawrence River in Montreal, Canada. Our U.S. building company Turner is extending San Antonio Airport in Texas.
Orders secured by the HOCHTIEF Europe division include the extension of the international airport in the Saudi Arabian capital of Riyadh, worth some EUR 1.3 billion in total. In Austria, a HOCHTIEF Europe joint venture was awarded the EUR 450 million Gloggnitz tunnel project.
Group outlook confirmed
For 2015, HOCHTIEF expects operational net profit of between EUR 220 million and EUR 260 million, representing an increase of 15% to 35% year-on-year (2014: comparable operational net profit of EUR 190 million).
"The sustainability of the higher level of cash-backed profits we are expecting in 2015 is underpinned by a much stronger balance sheet, which we have significantly de-risked," said Fernández Verdes.
HOCHTIEF Group: Key operating indicators
HOCHTIEF Group: Nominal figures
Forward-looking Statements
This document contains forward-looking statements. These statements reflect the current views, expectations and assumptions of the Executive Board of HOCHTIEF Aktiengesellschaft concerning future events and developments relating to HOCHTIEF Aktiengesellschaft and/or the HOCHTIEF Group and are based on information currently available to the Executive Board of HOCHTIEF Aktiengesellschaft. Such statements involve risks and uncertainties and do not guarantee future results (such as earnings before tax or consolidated net profit) or developments (such as with regard to possible future divestments, general business activities or business strategy). Actual results (such as earnings before tax or consolidated net profit), dividends and other developments (such as with regard to possible future divestments, general business activities or business strategy) relating to HOCHTIEF Aktiengesellschaft and the HOCHTIEF Group may therefore differ materially from the expectations and assumptions described or implied in such statements due to, among other things, changes in the general economic, sectoral and competitive environment, capital market developments, currency exchange rate fluctuations, changes in international and national laws and regulations, in particular with respect to tax laws and regulations, the conduct of other shareholders, and other factors. Any information provided on dividends is additionally subject to the recognition of a corresponding unappropriated net profit in the published separate financial statements of HOCHTIEF Aktiengesellschaft for the fiscal year concerned and the adoption by the competent decision-making bodies of HOCHTIEF Aktiengesellschaft of appropriate resolutions taking into account the prevailing situation of the Company. Aside from statutory publication obligations, HOCHTIEF Aktiengesellschaft does not assume any obligations to update any forward-looking statements.