Hellenic Technodomiki TEV’s net results for 2006 are estimated to increase by more than 10 percent
The country’s largest construction group, Hellenic Technodomiki, is seen posting a 10.3 percent rise in 2006 net profit, mainly on increased revenues from tolls on roads it operates, analysts said. Eight analysts polled by Reuters forecast an average net profit of 67.3 million euros last year versus -61 million a year earlier. Technodomiki has been involved in many Greek public projects in recent years. It operates a key ring road in Athens and the Rio-Antirio bridge connecting southern Greece to the mainland. The contractor, also active in waste management and wind energy, is looking to expand abroad to offset lower profit margins at home. Construction activity declined considerably in Greece after this country staged the Olympic Games in 2004. Analysts say this has eroded profit margins as it raised competition and forced contractors to bid for projects at significant discounts. Earnings before interest, tax, depreciation and amortization (EBITDA) are seen down 12.2 percent to -85 million, as the firm recorded high start-up costs for new projects abroad. The new projects are expected to have accounted for about one-third of its backlog last year, which is estimated at about -4 billion from -950 million at the end of 2005, analysts said. Sales are seen up 19.3 percent to -694.14 million with construction activity making up about 90 percent of the group’s total revenues. Technodomiki signed a $1.9 billion project in Oman together with a Turkish contractor last year. It will also take part via a joint venture in a $199 million airport project in Qatar. In February, it said it will merge its construction arm Aktor with part of Greek builder Pantechniki in a bid to boost its competitiveness. Its shares have gained about 36 percent since the start of the year, outperforming the Athens general index by 27 percent. The stock trades at around 27 times its estimated 2007 earnings, compared to a P/E ratio of 21 for European peers. Analysts attribute the premium partly to the firm’s strong prospects of winning new projects in the Balkan and the Middle East along with new Greek-built and -operated projects.
