Dear Shareholders and Friends of HOCHTIEF,
At the end of the first half of 2007, I can once again present
to you healthy figures for the HOCHTIEF Group. For example,
we succeeded in raising Group profit before taxes by almost
25 percent to EUR 181.8 million.
With our service portfolio broken down into four modules - development, construction, services as well as concessions and operation - we continue to enjoy overall success. Losses in our Europe division can be compensated for by the sound performance of all other areas. For HOCHTIEF Europe, we continue to forecast pretax profit to the tune of up to negative EUR 120 million for the year as a whole. While in the first six months of the year substantial losses accrued in the German building construction business of this division, we anticipate a positive contribution to earnings in the second half of the year.
To make this happen, we are working very systematically in Germany's general building segment to eliminate the problems which occurred at HOCHTIEF Construction. The countermeasures we have implemented, essentially affecting tender preparation, are showing first signs of success. We have further reduced our activities in the traditional general contracting business on the German construction market. In contrast, we aim to forge ahead with high-margin segments such as real estate development.
The concessions and operation module clearly reflects our company's excellent position. We succeeded in boosting the value of our concessions portfolio once again: As of June 30, 2007, projects totaled a net present value of EUR 1.5 billion, equivalent to a gain of EUR 436.4 million compared with December 31, 2006. In the second quarter, we scored a major success with the contract to acquire a majority stake in Budapest Airport* where HOCHTIEF AirPort already took over operational management in June.
HOCHTIEF PPP Solutions can also report an upward curve, both in Germany and internationally: In July, we were awarded the contract to refurbish, build and operate four schools in
In our mining concessions business in the Asia-Pacific region, we have once again acquired several large-scale contracts which serve to secure our already high capacity utilization levels. In July alone, we won new orders to the tune of around EUR 410 million. Our subsidiary Leighton currently mines more than 100 million tonnes of coal and over 100 million tonnes of iron ore a year, which makes us the world's largest contract miner.
In our development module, our activities continue to reap success. A recent study by the market research institute Bulwien-Gesa indicates that HOCHTIEF is the "most active project developer" on the German market: On June 30, 2007, projects worth a total of around EUR 1.88 billion were under development. Of these, projects worth EUR 816 million were already under construction. We continually tap new growth potential through innovations such as Quartier 21. With this pioneering project in Hamburg, we are giving shape to a concept for cross-generational living.
In our services module, we have strengthened our position: On July 1, HOCHTIEF took over the property management activities from Allianz Immobilien GmbH, thus complementing our portfolio with professional property management services. HOCHTIEF Property Management GmbH will be one of the leading providers in this field in Germany. We now offer end-to-end coverage of today's property management spectrum.
We aim to harness the strong potential in the dynamic healthcare facilities market. In the second quarter, we succeeded in expanding HOCHTIEF Facility Management's involvement in the healthcare field: The company has taken over technical facility management for all hospitals run by SRH Kliniken GmbH.
In our construction module, the strong regional diversification trend continues unabated at HOCHTIEF: In the Asia Pacific division, our earnings trend is once again outstanding. In the US market, our subsidiary Turner is putting in an impressive performance with a large number of profitable new contracts. In Eastern Europe, too, we are well poised with our Europe division, garnering several large-scale projects in the second quarter.
