HOCHTIEF Asia Pacific Division
| (EUR million) | Q1 2009 |
Q1 2008 |
Percentage change |
Full year 2008 |
|---|---|---|---|---|
| New orders | 1,786.7 | 2,000.0 | -10.7 | 12,651.0 |
| Work done | 1,991.8 | 2,152.8 | -7.5 | 8,638.9 |
| Order backlog | 16,445.7 | 14,284.2 | 15.1 | 16,194.2 |
| Divisional sales | 1,759.7 | 1,242.1 | 41.7 | 6,884.8 |
| External sales | 1,759.6 | 1,242.0 | 41.7 | 6,884.5 |
| Operating earnings (EBITA) | 95.4 | 104.2 | -8.4 | 427.5 |
| Profit before taxes | 71.2 | 83.0 | -14.2 | 327.2 |
| Capital expenditure | 127.2 | 305.3 | -58.3 | 1,005.2 |
| Net assets | 2,313.5 | 2,095.1 | 10.4 | 2,081.5 |
| Employees | 38,303 (End Q1 2008) | 29,962 (End Q1 2008) | 27,8 | 37,076 (2008 average) |
In local currency, new orders and work done were up by 5.3 percent and 9.1 percent respectively. The increase in work done was based on strong performance in infrastructure construction and contract mining. Due to the weak exchange rate compared with the prior-year quarter, new orders and work done in euros were actually 10.7 percent and 7.5 percent lower respectively than the comparable 2008 figures. External sales were up by 41.7 percent to EUR 1.76 billion. The order backlog stood at EUR 16.45 billion, a 15.1 percent increase over the prior-year quarter which resulted from the award of a number of major infrastructure- and resources-related contracts and extensions.
On an exchange rate adjusted basis, operating earnings and profit before taxes were up on the prior-year period (by 8.5 percent and 2.4 percent respectively). Alongside exchange rate effects, earnings were also pushed down by financing costs: We had borrowed in 2008 to participate in the share issue at Leighton.
Capital expenditure was significantly lower year on year. In the prior-year quarter, the equity investment of approximately EUR 150 million made in the toll road concession company Connect East, which fell due on completion of the Eastlink project, led to a higher level of capital expenditure.
The resources market has continued to support a good level of work and again brought new opportunities in the first quarter. In Australia, Leighton subsidiary HWE Mining was awarded a five-year contract extension worth EUR 201 million at the Orebody 23/25 iron ore mine in Western Australia. However, a number of mines are experiencing reduced volumes.
In Indonesia, Thiess was awarded a seven-year contract extension for two coal mines. The PT Arutmin Indonesia contract is valued at EUR 1.18 billion. Thiess' operations commenced at the Senakin mine in 1989 and at the Satui mine in 1998. In the future, operations on both sites will mine a total of 12 million metric tons of coal per annum.
We also landed new contracts in the Gulf States. Thiess Services signed a 15-year waste management concession contract with the Abu Dhabi Government worth EUR 233 million for the management of construction and demolition debris for the Emirate of Abu Dhabi.
In Australia, progress on Leighton's major construction projects continued as planned. Preparatory work began in Brisbane on the construction of the AirportLink toll road, with the North South Bypass Tunnel and Gateway Upgrade Duplication both ahead of schedule.
HOCHTIEF Asia Pacific outlook
The Australian government has launched an economic stimulus package that is expected to generate new infrastructure contracts in the next 18 months. Leighton therefore anticipates being awarded several projects in the coming months.Commercial building and property development work is forecast to remain depressed in the short term, whereas the residential market holds promise thanks to the Australian Government's incentives for home buyers.
Given the large order backlog at Leighton and the company's strong competitive position and diversified services, we expect profit before taxes in 2009 to be largely on a par with the prior-year level assuming no further deterioration of the financial and economic environment.
