Hochtief: P3 pipeline ‘very substantial’

Contractor Hochtief has identified a ‘very substantial’ P3 pipeline in its key markets.

Hochtief chairman and chief executive officer Marcelino Fernández Verdes has noted the currently identified P3 tender pipeline in the German group’s key markets is “very substantial at over €210bn” ($240bn). Pipeline of all relevant projects “remains strong” in North America, Asia-Pacific and Europe and currently stands at about €500bn ($571bn) for the remainder of 2018 and beyond.

The group has ended the first nine months of 2018 with €1.3bn of net cash after €259m dividend payments in the third quarter of 2018. 

“This has been driven by solid operational results in all divisions and a first significant contribution from our investment in Abertis. Our performance and our strong project pipeline leave us well positioned to meet our 2018 guidance and provide a positive outlook.”

Nominal net profit rose by 33% to €403m which includes a €58m contribution from the 20% equity consolidated stake in Abertis.

Meanwhile, in its nine month interim report, Skanska’s president and CEO Anders Danielsson reiterated its plans in the US to no longer bid for mega design-build P3 or Engineering Procurement and Construction projects as “it is clear that the risk-reward profile in the mega design-build projects is not attractive”.

The Swedish group’s Infrastructure Development stream will be concentrated on securing and developing the value of existing P3 assets “and realize these development gains over time”.

Revenue amounted to SEK 120.8bn ($13.4bn) compared to SEK 117.2bn for the same period last year. Operating income decreased 49% to SEK 2.4bn.

Project write-downs of about SEK 0.9bn relate to the construction works of two ongoing P3 projects in the US and are caused by additional cost overruns due to lower production rates and delays.