Friday October 31, 2014 Search
Weather | Athens
18o C
13o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Hochtief sells airport units, including Athens International, to Canada’s PSP to focus on building

By Alex Webb & Sheenagh Matthews

Hochtief AG agreed to sell its airports division to Public Sector Pension Investment Board of Canada as Germany’s largest construction company narrows its focus to building. The stock rose to a 21-month high.

The deal values the business, which has stakes in airports in Athens, Budapest, Dusseldorf, Hamburg, Sydney and the Albanian capital of Tirana, at about 1.5 billion euros ($2 billion) and Hochtief will get 1.1 billion euros as some shares are held by business partners, the Essen, Germany-based builder said today in a statement.

“The price makes it look more like a gift,” said Marc Gabriel, an analyst at Bankhaus Lampe KG. “In the end, there’s not much left for the shareholders, because no extraordinary result was achieved with the sale. OK, they managed to sell it after almost four years, but the price is not sexy.”

Chief Executive Officer Marcelino Fernandez Verdes, who took over in November and comes from Spanish majority owner Actividades de Construccion & Servicios SA, is reversing the German company’s decade-long strategy of expanding into services. Hochtief is also looking into selling its real-estate development, facility and energy-management units.

“You can’t generate much margin with infrastructure and building and you have to take on high risk,” said Bankhaus Lampe’s Gabriel, who has a hold recommendation on Hochtief stock. “That puts a big question mark on whether it will work to completely focus on building again.”

Hochtief rose as much as 7.8 percent to 57.55 euros, the highest intraday price since July 27, 2011, and was trading up 5.7 percent at 4:03 p.m. in Frankfurt, valuing the company at 4.35 billion euros. The stock has jumped 28 percent this year, the best performance on the Stoxx 600 Construction and Materials Index, which has gained 6.2 percent.

The German company predicts full-year pretax profit will be in a range of 600 million euros to 680 million euros, with net income at 180 million euros to 220 million euros, excluding earnings from the airports and one-time reorganization costs, it said today. Hochtief’s earlier forecast was for net income of 174 million euros to 190 million euros.

The building company will announce any job-cut measures in the “middle of the year,” CEO Fernandez Verdes said today at the annual shareholders meeting in Essen.

First-quarter pretax profit was 123 million euros versus a year-earlier loss of 92 million euros. Earnings exceeded the average 111 million-euro average of three analyst estimates compiled by Bloomberg.

In Hochtief’s failed attempt to sell its six airports last year, bidders including Vinci SA, Europe’s biggest builder, and China’s HNA Group offered more than 1 billion euros for the business, while the German company valued it at as much as 1.6 billion euros, people familiar with the process said at the time.

The transaction with Montreal-based PSP was “the result of a very competitive tendering process,” and Hochtief expects no significant “extraordinary earnings impact from the transaction,” it said today. The disposal is subject to certain conditions and is expected to close in the second half of the year. Deutsche Bank AG advised Hochtief on the sale.

Hochtief, the builder of Frankfurt’s Commerzbank tower, plans to dedicate proceeds from selling divisions to repaying debt, investing in the infrastructure division and entering new industries, it has said. The German company may pay a special dividend following the disposals, Fernandez Verdes said when presenting 2012 full-year results in February.

“The reason they give for the sales is to bring down net debt,” Gabriel said. “The net debt of Hochtief isn’t really the problem, it’s more the net debt of ACS.”

While the 140-year-old company is looking at ways to deepen cooperation with Madrid-based ACS in Asia and North America, it has no plans to expand in China, Fernandez Verdes said today.

“We are trying to avoid risks,” he told shareholders. “The Chinese construction market is dominated by large, non- private Chinese constructors.”

[Bloomberg]

ekathimerini.com , Tuesday May 7, 2013 (10:43)  
Cyprus ruling opens way for bailout funds
Yields on Greek debt fall 22 basis points
Piraeus Bank paves way for share capital increase
Big monthly drop for stocks
Ministry swap halts talk of reshuffle as reforms eyed
Prime Minister Antonis Samaras on Friday appointed Nikos Dendias as defense minister, replacing outgoing Dimitris Avramopoulos, who assumes the European Commission’s immigration portfolio ne...
Turkish-Greek cooperation in Aegean helps stem flow of migrants
Closer cooperation between Greek and Turkish coast guard authorities has led to 11,000 undocumented migrants being prevented from entering Greek borders and returned to the neighboring count...
Inside News
BASKETBALL
Obradovic watches Greens thrash his Fenerbahce
The second homecoming of former Panathinaikos coach Zeljko Obradovic, now at Fenerbahce, was not as emotional as last year’s, but it was certainly was the night of an emphatic triumph for th...
SOCCER
Berg returns to add spice to Panathinaikos´s Cup win
The second round of games for the group stage of the Greek Cup produced plenty of interesting games and results in midweek, but it still lags the upset potential that the knock-out stages of...
Inside Sports
COMMENTARY
The judiciary’s responsibility
The reform efforts over the past few years have begun to bear fruit. Greece has improved its standing in the World Bank’s Doing Business rankings, rising 48 positions from 2010 to 61st place...
EDITORIAL
Findings raise eyebrows
An investigation into money transferred to foreign banks by civil servants since 2010, when Greece’s brutal debt crisis erupted, has come up with some striking findings. The checks, which we...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Ministry swap halts talk of reshuffle as reforms eyed
2. Cyprus ruling opens way for bailout funds
3. Turkish-Greek cooperation in Aegean helps stem flow of migrants
4. Yields on Greek debt fall 22 basis points
5. Holocaust memorial in Athens vandalized
6. Piraeus Bank paves way for share capital increase
more news
Today
This Week
1. Man shot dead, woman injured in Vathis square attack
2. Archaeologists find underground vault at Amphipolis tomb
3. Cyprus’s Georgiades bets on economy for Irish-style bailout exit
4. Greek retail sales rise for third month in a row
5. Germany’s 10-year bonds decline before euro-area inflation data
6. New defense minister to be appointed without reshuffle
Today
This Week
1. Austria’s creative bookkeeping beats Greece on secret debts
2. End of reason, end of humanity
3. Clean bill of health for Greek banks from stress tests
4. Samaras pledges action after flash floods in Athens
5. Eurobank, National Bank restructurings eliminate capital gap
6. Athens flood damage assessed, compensation payments to begin
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.