Andritz AG, the world’s second-biggest maker of hydropower turbines, lost 796 million euros ($1 billion) of its market value after cost overruns at a Brazilian pulp mill led to a profit warning.
Andritz fell 15 percent, the most ever, to 42.115 euros at the close in Vienna. More than 18 times as many shares changed hands than the average trading volume over the last three months. The Graz, Austria-based company’s market value fell to 4.38 billion euros, the lowest level since September.
Cost overruns at a Brazilian pulp mill being built by Andritz caused “significantly” lower profit than expected in the first quarter, the company said, adding that net income will probably decline this year. First quarter profit fell 92 percent to 4.1 million euros, the company said after markets closed on April 30. Order intake dropped 5.4 percent to 1.29 billion euros.
“This could raise concerns over Andritz’s capacity to win new large-scale order awards given the potential reputational damage and its more conservative bidding approach going forward,” Citigroup analyst Alex Atienza, who is “neutral” on Andritz shares, wrote in a research note.
Goldman Sachs maintained its “conviction buy” recommendation on Andritz shares while lowering its six-month price target to 66 euros, the bank wrote today in a research note. “Andritz is strongly positioned to benefit from long-term growth trends,” Goldman said. Commerzbank and Hauck & Aufhaeuser raised their recommendations to buy today.