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Strabag posts earliest-ever break-even point

1 Sep 11 Central and eastern European contracting giant Strabag has posted positive half-year earnings for the first time in its company history, reaching the break-even point within the first six months of this year.

Revenue and output both showed double-digit growth. The growth was in all segments and was particularly significant in Germany, Poland and northern Europe.

The seasonal nature of construction means that its break-even point in the earnings before interest and taxes (EBIT) is normally not until the third quarter, but this year it has already reported a positive value of €16.67m (£14.8m) in the first half of 2011.

CEO Hans Peter Haselsteiner said: “The first months of the previous year were characterised by a very long winter. This year’s weather conditions allowed us to begin building significantly earlier, which is why we are pleased to report of double-digit growth of the output volume at the halfway point. We also have good news on the earnings side: last year’s earnings before interest and taxes (EBIT) were significantly positively distorted by a one-off effect in the balance sheet. This makes it that much more remarkable that, for the first time in company history, we have registered a positive EBIT already at the half-year mark. We already raised our forecast for the full year 2011 and beyond during the presentation of the interim report for January-March 2011. Today I would like to confirm this outlook. We expect an output volume of €14.0 billion in 2011 and of €14.3 billion in 2012. The EBIT should come to rest at least at € 320million this year and at € 330 million next year.”

Strabag generated an output volume of € 6.1bn in the first half of 2011, which corresponds to an increase of 17%. Unfavourable weather conditions had led to a significant decline in the output volume in the previous year. Increases could be seen in all segments this year. The consolidated group revenue of the first six months of the 2011 financial year grew in line with the output volume, reaching €5.9bn from €5bn in the same period the year before (+18 %).

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The mid-year order book value was €14.9bn, which was 6 % lower than at the end of June of the previous year. The company said that this can be attributed for the most part to the cancellation of projects in Libya due to the political unrest there. Poland is another factor of influence: the previous year’s orders for large infrastructure projects are now under way. In Austria and Romania, by comparison, the order backlog is on the rise with projects including the Koralm Tunnel in Styria and several new road construction orders in Romania.

The EBITDA (earnings before interest, taxes, depreciation and amortisation) for the first six months of the 2011 financial year rose by 6 % to €197.18m on earnings contributions from Germany and Poland. 

The number of employees grew by 6% to 75,325. Nearly half of the more than 4,000 new employees were previously employed by Rimex, a German company acquired by Strabag. The significant increase in Switzerland can be explained by the first-time inclusion of the employees of the two acquired companies Brunner Erben Holding AG and Astrada AG.

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