Hochtief Delays Airports Sale on Economy, Warns of Possible Full-Year Loss

Hochtief AG (HOT), Germany’s largest builder, said the sale of an airport-operating business is being delayed by the struggling European economy and a failure to agree to a deal this year may result in a net loss.

The company is in “close” negotiations and is confident of a transaction in the near future, yet a deal may not happen in 2011 as previously announced, Essen-based Hochtief said today in a statement. A sale beyond this year would result in a net loss of about 100 million euros ($137 million), it added.

Hochtief’s sale of its airport-operating business is coinciding with a spreading sovereign-debt crisis that’s weighing on investor sentiment. While the talks with China’s HNA Group Co. and Vinci SA (DG) of France continue, the parties have hit obstacles over the price, people familiar with the transaction said on Nov. 2. Hochtief said it expects “strong operating earnings” of about 100 million euros, without a deal.

“Management seems to have lost confidence in the sale of the airports in general and also in the underlying operating performance,” said Ingbert Faust of Equinet Bank in Frankfurt. He expects Hochtief not to pay a dividend for 2011.

Hochtief shares fell as much as 9.7 percent to 46.15 euros in Frankfurt trading as of 9:36 a.m., the largest decline in more than three months. They have lost 26 percent this year for a market value of 3.61 billion euros.

Bidders including Vinci, Europe’s biggest builder, and HNA Group, offered more than 1 billion euros for the unit, people familiar with the process said in August. Hochtief itself values the asset at as much as 1.6 billion euros, the people said at the time.

Canceled IPO

The company in December 2009 shelved an attempt at an initial public offering of the concessions unit, which includes the airports operations, citing a slump in global capital markets. This year, the company had revived the process and later trimmed the assets offered to airports only.

Hochtief, which said it is also reviewing the assessment of potential risks for road contracts in Greece and Chile, expects 2012 pretax profit to be “significantly” higher than the record set in 2010. Its guidance includes the sale of interests in Aurelis Real Estate and a gain from the sale of the airports business in 2012.

The outlook for 2013 is unchanged, the company said today. Hochtief had earlier forecast net profit this year to exceed the 288 million euros earned in 2010, with the measure at about 500 million euros in 2012.

Hochtief today reported net income of 98.7 million euros for the third quarter, on sales of 5.38 billion euros.

To contact the reporters on this story: Blanche Gatt in London at bgatt@bloomberg.net; Richard Weiss in Frankfurt at rweiss5@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net

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