Bilfinger Sees Stronger Second Half on U.S. Business UpturnAlex Webb
Bilfinger SE, Germany’s second-largest builder, predicts the second half of the year will be “significantly stronger” because of rising demand in the U.S. The stock gained the most in more than two months.
“Further recovery of the U.S. domestic economy is expected for the second half of 2013,” Mannheim-based Bilfinger said in a statement. “In Europe, it can be assumed that the situation of the crisis countries will continue to stabilize as the year progresses.”
HeidelbergCement AG, the world’s third-largest maker of cement, posted profit in the second quarter that exceeded analysts’ expectations as sales in North America and the recovering U.K. market offset declines elsewhere in Europe. Bilfinger Chief Executive Officer Roland Koch plans to focus on deals outside Europe, particularly in the U.S., with the 850 million euros ($1.1 billion) he has available.
The shares gained as much as 2.38 euros to 74.47 euros and were up 3.3 percent as of 1:29 p.m. in Frankfurt trading, valuing Bilfinger at 3.4 billion euros. Before today, the stock had dropped 1.3 percent while the DAX benchmark index had risen 10 percent.
Second-quarter net income fell to 47 million euros from 62 million euros as declines in the facilities and construction units outweighed increases at the industrial and power divisions. That was in line with the average estimate of five analysts surveyed by Bloomberg. Output volume was steady at 2.17 billion euros while orders increased 2.6 percent to 2 billion euros.
“We can see developments going forward which are heading in the right direction,” Koch said on a conference call with journalists. “Orders and work picked up in the second quarter.”
Acquisitions lie at the core of Koch’s strategy to turn Bilfinger from a construction company into a services provider with net income of about 400 million euros in 2016. Part of the plan is to reduce exposure to higher-risk, lower-margin construction projects.
Koch, the former prime minister of the German state of Hesse, is planning deals in the 300 million euro to 400 million euro range, with the energy sector and industrial services high priorities.
Bilfinger is also seeking to reduce costs in administrative and sales functions. Measures may include cutting jobs, Koch said today.
The company reiterated its full-year forecast for an improving earnings before interest, taxes and amortization and adjusted net income from the 2012 levels of 378 million euros and 231 million euros respectively.