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Bauer AG on Track after the first Half of the Year 2018 Featured

  • Total Group revenues are 12.2% less than the previous year with EUR 792.3 million; sales revenues decreased by 13.6% to EUR 717.1 million
  • EBIT amounts to EUR 34.1 million (previous year: EUR 38.6 million); Earnings after tax improve to EUR 1.6 million (previous year: EUR 0.1 million)
  • Order backlog with EUR 1,000.3 million at high level (previous year: EUR 1,044.7 million)
  • Full-year forecast confirmed


Business at the Bauer Group is going according to plan. After the first half of the year, total Group revenues stood at EUR 792.3 million, 12.2% below the exceptionally high previous-year figure of EUR 902.3 million. The sales revenues declined by 13.6% to EUR 717.1 million. EBIT came to EUR 34.1 million after EUR 38.6 million in the previous year. The earnings after tax with EUR 1.6 million were higher than the previous year's value of EUR 0.1 million. This is primarily attributable to the fact that currency effects did not have the same negative impact as in the previous year and thus improved the financial result. The order backlog fell by 4.3% compared to the same period of the previous year, but increased by 2.3% to EUR 1,000.3 million compared to the end of 2017, and is therefore still at a high level. Order intake declined by 13.2% from EUR 938.9 million to EUR 814.8 million.

Business segments

With its three segments – Construction, Equipment and Resources – and its broadly diversified business model, the Group operates in more than 110 subsidiaries in some 70 countries around the world.

As expected, the Construction segment was well below the exceptionally strong previous-year, which was characterized by major projects. The total Group revenues amounted to EUR 327.1 million (previous year: EUR 431.6 million). The decline in revenues of 24.2% was due to lower capacity utilization in Germany and postponements of large projects in the Middle East and other individual projects. EBIT developed in line with revenues and fell from EUR 13.4 million to EUR 4.8 million. By contrast, earnings after tax were at the previous year's level of EUR -4.1 million (EUR -4.2 million), as negative currency effects had a significantly lower impact than in the previous year. The company expects to catch up with revenues in the second half of the year and that the earnings will also be better. Order backlog in Germany, England and the Far East as well as a number of opportunities for major projects form the basis for this. Order backlog in the segment fell slightly by 3.6% to EUR 507.2 million (previous year: EUR 526.4 million). Order intake of EUR 341.6 million was 8.3% below the previous year's level of EUR 372.7 million.

The Equipment segment continues to benefit from the continued economic trend on the global construction markets. After the first six months, total Group revenues increased by 0.6% from EUR 372.1 million to EUR 374.5 million. Sales revenues declined slightly by 3.2% from EUR 312.3 million to EUR 302.2 million. In the previous year, the sale of two deep drilling rigs was included here, so that there is a significant increase in specialist foundation engineering equipment compared to 2017. EBIT increased significantly: it climbed from EUR 23.9 million in the previous year to EUR 36.3 million. Earnings after tax improved from EUR 6.6 million to EUR 16.1 million. These results are attributed to high sales levels and continued good delivery figures for equipment. Order backlog in the Equipment segment has decreased from EUR 201.7 million to EUR 171.6 million. Order intake declined by 7.7% from EUR 429.7 million to EUR 396.7 million. The production utilization and the good order backlog give us reason to expect continued positive development in the coming months.

The Resources segment was able to again increase its revenues in the second quarter. After the first half of 2018, total Group revenues now amount to EUR 119.2 million, just 6.7% below the previous year (EUR 127.7 million). However, EBIT decreased from EUR 0.8 million to EUR -6.7 million and earnings after tax from EUR -4.0 million to EUR -9.3 million. The segment is still in a phase of reorganization. The order backlog amounted to EUR 321.5 million, representing an increase of 1.5% against the previous year of EUR 316.6 million. This is mainly attributable to the major project for the expansion of the reed bed treatment plant in Oman. This contract is worth about EUR 160 million and is not fully included in the order backlog due to the long duration of the project. At EUR 104.9 million, order intake was significantly lower than the previous year's intake of EUR 165.6 million.

Outlook

The company is sticking to its full-year forecast provided at the annual press conference in April. This forecasts total Group revenues of about EUR 1.8 billion and EBIT of around EUR 90 million. Earnings after tax are expected to be significantly higher than in the previous year.

“We continue to see a positive trend for our business operations and have many new project opportunities,” states Prof. Thomas Bauer, Chairman of the Management Board of Bauer Aktiengesellschaft. “Construction will be able to increase its revenues and earnings in the second half of the year and the Resources project in Oman will be fully under construction then. Particularly pleasing is the very positive development of the Equipment segment, which again achieved very good results.”

Source: Bauer AG

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