Austria’s third-biggest construction company has warned its shareholders of potential losses.
Porr AG announced today (Thurs) it might suffer a loss of 70 to 80 million Euros before tax by the end of this year. The firm said it was challenged by write-offs in Eastern European (EE) countries like Hungary and Romania where state-owned institutions failed to pay for assignments. Porr explained today that “intense negotiations” about a continuation of payments had not born any fruit to this point.
The Vienna-based enterprise stressed that it could give a “stable” long-term outlook despite the latest difficulties in EE – but also warned that it was still difficult to determine the severity of the Eurozone’s debt crisis effects on the real economy.
Porr achieved orders worth 2.4 billion Euros in the third quarter of 2011, 36.6 per cent more than in the same time span of last year. A spokesman for the company, which is headed by Karl-Heinz Strauss, explained that Porr benefited from increased demand for its services abroad since the volume of domestic assignments declined by 0.3 per cent to 1.277 billion Euros.
Porr has around 11,000 employees. It is the country’s third-busiest building firm behind market leader Strabag SE and Alpine Bau AG (Alpine). Strabag recently finished a motorway construction assignment in Poland half a year earlier than planned. The Viennese company was in charge of 90 per cent of activities necessary to create the 160-kilometre (km) stretch.
Poland is an important market for Strabag and its Austrian competitors these days. The prospering European Union (EU) member has invested large sums into infrastructure projects in the past years to improve roads, airports and stadiums ahead of the European Football Championship this summer. Poland and Ukraine will cooperate about hosting the tournament.
Only in September, it emerged that affiliates of Alpine were assigned to build a hotel at Warsaw Chopin Airport (WAW) for 32 million Euros. The Polish order is worth 32 million Euros, according to reports. It will be carried out by Alpine’s Polish and German subsidiary companies. The company, which has its headquarters in Salzburg, said the five-star hotel would have over 220 rooms and a luxury spa area. Alpine has around 16,000 staff in Austria and abroad.
Strabag chief Hans Peter Haselsteiner said in August that his company employed 73,000 men and women in the first half of 2011. The entrepreneur explained that this was a six per cent workforce level increase compared to the first half of 2010. Strabag carried out assignments worth more than six billion Euros between January and June 2011, up by 17 per cent compared to the value of activities in the first six months of last year. Earlier this month, Strabag accomplished an order to set up a steel factory in Russia for 320 million Euros. The Vienna-based firm made headlines in March by acquiring Swiss construction companies Brunner Erben Holding AG (Brunner Erben) and Astrada AG.