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Press release

PORR in Q3 2017: 20% increase in production output; growth causes earnings to fall below previous year, as expected

  • Production output up by 19.9% to EUR 3,343m 
  • Order backlog climbs to all-time high of EUR 5,808m
  • Order intake increases by 28.2% to EUR 4,347m 
  • EBT declines in line with expectations to EUR 28.4m, 30.3% lower than previous year


Vienna, 29 November 2017 – In the third quarter of 2017 PORR’s output built on the success of the preceding quarters. As already forecast, lower contributions from Germany and Qatar caused earnings to decline against the previous year. The decrease was caused by integration costs generated by the rapid expansion of the market position in Germany, as well as one-off rises in logistics costs in Qatar.
 
 
In the first nine months of 2017 PORR generated production output of EUR 3,343m, thereby achieving an increase of 19.9%. In addition to organic growth, the rise was also generated by the companies acquired – in Germany, for example, around EUR 200m of production output came from acquisitions. In Austria hardly any output from the takeover of the Hinteregger Group was booked, as the acquisition only closed at the start of September. The most important markets remained the five home markets – Austria, Germany, Switzerland, Poland and the Czech Republic – responsible for around 86% of production output. The share of total output accounted for by Germany rose significantly; this market now accounts for around 25%. Every PORR operating unit achieved double-digit growth in output in the period under review. 
 
Karl-Heinz Strauss, CEO of PORR, on the quarterly results: “In recent months we have laid important foundations in terms of both operations and organisation. PORR is optimally positioned for the coming years. We have secured the basis needed to maintain our growth course. Through the acquisitions undertaken in Germany we are now able to serve the Central and North German infrastructure market with our own qualified personnel. In Austria the Hinteregger Group is the ideal complement to our service portfolio with its expertise in civil engineering. Now it’s all about integrating the new units, which will also be a focus next year, with the constant goal of sustainable growth and increasing our earnings”. 
 
In addition to production output, the order backlog and order intake also experienced sharp rises. The order backlog grew by 12.1% to EUR 5,808m, setting a new all-time high again. The order intake rose even more rapidly; at EUR 4,347m it was up by 28.2% against the previous year. Around two-thirds of the growth in the order backlog was generated by corporate acquisitions. 
 
As forecast, earnings fall below previous year
 
In terms of earnings, the acquisitions in Germany and consequent rapid expansion of structures led to high expenses. Every expense item thereby contains expenses for Germany that have not yet led to adequate output. In Qatar there was an increase in costs resulting from the more complex logistics and procurement processes due to political turbulence, although all projects are progressing as planned. The cost increases led to an overall decline in EBITDA of -1.4% to EUR 110.8m. The increase in amortisation, depreciation and impairment expense led to a decrease in EBIT to EUR 33.1m, while EBT of EUR 28.4m was 30.3% below the comparable level in 2016. The profit for the period slipped back by 30.4% to EUR 21.3m. A reduction in cash and cash equivalents as well as taking out loans and borrowings caused net debt to increase to EUR 500.5m (net cash position at 31 December 2016: EUR 53.3m).
 

Attractive tenders on every market
 
The largest new order in 2017 was the major German industrial project for BMW in Freimann, Munich, which is being implemented in cooperation with the client to state-of-the-art BIM and Lean standards. Other large-scale orders included the new railway line LK 354 Poznań–Piła in Poland and a section of the U5 metro line in Frankfurt. In Poland the road project E30 Kędzierzyn–Opole was acquired, along with the D3 Čadcain in Slovakia. Particularly welcome in Norway were the three new projects acquired: the E18 Varodd Bridge, the E18 Rugtvedt–Dørdal and the Bekkelaget sewage plant project near Oslo. The largest new orders in Austria were the Mur power plant consortium Graz, the Leopold-Böhm-Straße residential complex in Vienna and the PPP Berresgasse educational campus. In Switzerland PORR acquired two additional building construction projects at Zurich Central Station. 
 
Outlook for full year 2017 
 
Despite a sharp rise in production output, for the full year 2017 the Executive Board anticipates earnings somewhat below the level of the previous year due to the lower earnings contributions from Germany and Qatar.
 
The Interim Report on the 3rd Quarter 2017 is available for download from porr-group.com.
 
Contact:
 
Karl-Heinz Strauss

CEO
PORR AG
T. +43 50 626-1001
M. +43 664 626-1001
comms@porr-group.com 
 
Sandra C. Bauer
Head of Corporate Communications | Corporate Spokesperson
PORR AG
T. +43 50 626-3338
M. +43 664 626-3338
comms@porr-group.com

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