Bilfinger SE, the German builder turning itself into a services provider, cut its full year profit targets a third time this year, hurt by “difficult” markets for energy and European oil and gas.
Adjusted net income from continuing operations will be at least EUR160million ($210million) for 2014, the Mannheim, Germany-based company said. Previously Bilfinger had predicted EUR205million to EUR220million.
Chief executive Herbert Bodner took the helm last month after Bilfinger reduced its profit goals for the second time. Bodner, who was CEO from 1999 to 2011, took a fresh look at risks within the individual divisions, the company said.
“Management changes and new business processes need more time to effectively establish themselves,” Bilfinger said. “The difficult market situation in the energy and European oil and gas sectors also plays a role.”
Adjusted earnings before interest, taxes and amortization from continuing operations will be at least 270 million euros this year, Bilfinger said. Previously, the company had targeted EUR340million to EUR360million. Output will be about EUR7.7billion, close to what the company already predicted.
The stock has lost 27% this year, cutting the company’s market value to EUR2.7billion.
An “uncertain market environment” at the power unit requires a “fundamental reassessment” of the situation, Bilfinger said. Low capacity utilization and low price levels in relevant markets are hurting earnings, it said.
Bilfinger will book a writedown of about 30 million euros for a factory that makes steel foundations for offshore wind turbines in Poland, it said.
The company plans to give a medium-term outlook when it reports third-quarter earnings, it said.
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