Strabag SE (STR), central Europe’s biggest builder, said it will cut its dividend by two-thirds after full-year net income fell 69 percent on one-time effects.
The dividend will be cut to 20 cents per share from 60 cents a year earlier, the Vienna-based company said in a statement today. Net income tumbled to 60.6 million euros ($79.5 million) from 195 million euros after sales dropped 5 percent to 13 billion euros. Results for the year were also hurt by a one- time compensation cost of 43 million euros from arbitration proceedings.
“Our earnings are disappointing,” Chief Executive Officer Hans Peter Haselsteiner said in the statement. “Most of the factors contributing to these disappointing results are one-offs as well as construction site losses, which therefore won’t have a significant carryover into the current year.”
Haselsteiner, whose family owns 28.9 percent of the company, will step down as CEO after this year’s general meeting on June 14, a year earlier than originally planned, Strabag said yesterday. He will be succeeded by current Deputy CEO Thomas Birtel and continue to support the board as an “authorized representative” of the company, Strabag said.
Strabag shares rose 0.6 percent to 16.94 euros at 1:43 p.m. in Vienna trading.
The management change comes amid an austerity drive across Europe that has curbed public infrastructure spending and weighed on the builder’s profits. Strabag cut its 2012 forecast for earnings before interest and taxes to 200 million euros from 300 million euros in July and called the new goal “extraordinarily ambitious” three months later.
“Homemade errors” were another reason for the unsatisfying performance, Haselsteiner said at a press briefing in Vienna today, citing failed acquisitions and orders that shouldn’t have been accepted.
The company will participate in the bidding process for Hochtief’s services unit, which is beginning, Haselsteiner said. Strabag will not become a pure provider of services such as facility management, he said. “Construction is and will be Strabag’s core competency.”
Strabag forecast earnings before interest and taxes of at least 260 million euros this year with an output volume of 14 billion euros even as the management expects “another slight worsening of the business environment.”
Analysts had estimated 2012 net income at 65.2 million euros, according to data compiled by Bloomberg. Strabag was expected to pay a 30-cent dividend, according to data collected by Bloomberg.
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