Wienerberger Loss Triples as European Brick Business SinksAlexander Weber
Wienerberger AG, the world’s biggest brickmaker, said its fourth-quarter loss almost tripled as it wrote down the value of some units and booked expenses for a cost-cutting program. The shares dropped.
Wienerberger’s net loss widened to 93.7 million euros ($122 million), compared with a restated loss of 33.1 million euros a year earlier, spokesman Klaus Ofner said by phone. The company had 43 million euros of one-time charges last year for measures that will reduce future costs, Wienerberger said in a statement. The shares dropped as much as 5.6 percent in Vienna, the biggest intraday decline in seven months.
“Lower revenues and earnings in the Bricks & Tiles Europe division due to a decline in residential construction throughout Europe” weighed on last year’s result, Chief Executive Officer Heimo Scheuch said in the statement. A “modest recovery” in the U.S. and Wienerberger’s newly acquired plastic pipe unit helped offset that impact, he said.
Wienerberger’s main business depends on European home construction, which shrank 3.5 percent last year and may decline further this year, according to Euroconstruct. New residential construction, the main driver for brick sales, is on a downturn in nearly all European countries, Vienna-based Wienerberger said in November.
The stock traded 3 percent lower at 7.46 euros as of 12:30 p.m. local time.
“We constructed the cost-cutting program that we feel is necessary for this year,” Scheuch said today at a press conference in Vienna. “But I have to say: Who knows what the future brings for beautiful Europe?” .
Since 2009, the company has closed 60 plants, according to the CEO. It currently operates 226 factories. About 630 of its 13,000 employees are being fired in the latest cost-cut program, he said. The company took a charge of 10 million euros for the amortization of goodwill in units in Croatia and Lithuania last year.
Fourth-quarter earnings before interest, tax, depreciation and amortization rose 10 percent to 43.9 million euros, while revenue gained 40 percent to 611.4 million euros, as the consolidation of pipe unit Pipelife and the recovery of residential construction in North America helped, Wienerberger said. The company expects 2013 Ebitda to rise 14 percent to about 280 million euros, even as its European bricks business shrinks again this year.
“Guidance is disappointing with outlook comments suggesting markets in Europe remain challenging,” Flor O’Donoghue, an analyst at Dublin-based Davy, said in a note. “We remain cautious on the group.” Analysts expect Wienerberger to report an Ebitda of 283.8 million euros for 2013, according to data compiled by Bloomberg.
Wienerberger restated its 2011 results to reflect changes in accounting rules.
By 2016, the brickmaker plans on selling assets such as shut-down plants and buildings no longer needed worth 100 million euros. Chief Financial Officer Willy Van Riet said Wienerberger is not targeting any big purchases at the moment.
The company is proposing a dividend of 12 cents per share, unchanged from last year. “This is a sign to shareholders that we are confident about future development,” Scheuch said.