Hochtief: PPP pipeline ‘very substantial’

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

Hochtief chairman and chief executive officer Marcelino Fernández Verdes has noted the currently identified PPP tender pipeline in the German group’s key markets is “very substantial at over €210bn”.  Pipeline of all relevant projects “remains strong” in North America, Asia-Pacific and Europe and currently stands at about €500bn 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, the Royal Bam Group has reported an adjusted pre-tax result of €93.6m. The PPP project pipeline in its markets “remains healthy”, while there was a “good result” from the portfolio.

Rob van Wingerden, CEO of the Dutch contractor, said: ‘The market trends of the first half year continued in the third quarter of 2018, in line with our expectations. Construction and Property is having a strong year especially due to its leading position in the Dutch residential property market. 

“The overall result at Civil engineering was break-even; the good performance in the UK, Germany and Ireland – with margins well within the strategic target range – was offset by the Netherlands, Bam International and Belgium. Our PPP business delivered a solid result, ahead of last year.” 

There was a cash outflow on the sea lock Ijmuiden PPP of €80m in the first nine months of 2018 (compared to €3m for the same period last year). Constructive discussions are ongoing with the banking syndicate for this project to update the financing scheme and restart funding. At this stage it is not clear when these discussions will be finalised.