Positive signs after ‘hard winter’ for Strabag

The Austrian construction company has released results for the first quarter of 2010 showing a double-digit revenue decline on the back of a ‘long and hard winter’ but improving EBIT and EBITDA figures.

Strabag, the largest construction company in Central and Eastern Europe, posted a loss of €128.7 million in the first quarter of this year, a nine percent improvement on the €141.9 million loss recorded in the first quarter of 2009. Over the same period, revenue declined 14 percent from €2.08 billion to €1.80 billion, and output volume fell 16 percent from €2.2 billion to €1.8 billion.

Hans-Peter Haselsteiner, chief executive of Strabag, said in a statement that “the first quarter of 2010 was characterised by a long and hard winter, resulting in double-digit revenue decline”. However, he added: “I see no reason to change my outlook for the full year 2010 from the end of April. My management board colleagues and I continue to expect to close the financial year at the previous year’s levels in terms of both output volume as well as earnings.”

Strabag said it had improved results through cost-cutting and through the acquisition of Viamont DSP, a Czech railway construction company. From the first quarter of 2009 to the first quarter of 2010, Strabag cut its workforce by 7 percent from 73,720 to 68,318.

Strabag said its order backlog had reached a record €15.6 billion, largely due to the acquisition of large infrastructure projects in Poland last year, resulting in orders in that country increasing by more than €1.8 billion compared with the previous year to €2.9 billion. The contribution to the order backlog from transport infrastructure grew from 32 percent to 36 percent.

The firm said expenses for raw materials had been lowered in the last three months from 71 percent to 68 percent of revenue. As a result, EBITDA was “significantly less negative” at -€46 million, compared with -€66.3 million. The EBITDA margin improved from -3.2 percent to -2.6 percent.