September 29, 2023

Net result and demand situation – despite the downturn in construction: Strapage posted significant gains in the first half of the year

Following record reports from Bohr recently, Strabag, Austria’s largest construction group, has now announced significant increases in construction output and net results: Strabag increased construction production by 9 percent to €8.26 billion in the first half of the year. The construction group raised its net results to 76.6 million euros, after 43.8 million euros in the same period of the previous year, according to a group press release. In terms of construction output, the International + Special Divisions segment stood out with an increase of 13 percent to €1.73 billion, while the North + West (€3.63 billion) and South + East (€2.79 billion) regions stood out. About 7 percent.

High build performance

When it comes to construction performance, the group pointed to, on the one hand, a high backlog of orders of €24.32 billion, which extends to the fourth quarter of 2024, according to Strabag CEO Clemens Hasselsteiner. On the other hand, the rise in construction production is also due to the inflationary environment.

The construction group recorded the largest growth in its home markets in Austria and Germany, followed by Romania, Great Britain and Poland. However, Austria’s largest construction group posted declines in the Czech Republic, Denmark and Sweden, according to the half-year report. Consolidated group sales increased by 6 percent.

Austria backs off

The construction group reported increases in backlogs of orders in Germany, Romania, Croatia, Italy and Poland. Decreases were recorded in the Americas and Great Britain region due to the processing of major projects. In Austria, backlog also fell by 5 percent.

This is due to the change in interest rates and stricter lending guidelines for home loans, Strabag said. “While we are seeing very strong business activity in transportation infrastructure construction, there are some downward trends in building construction,” Haselsteiner said. “This is primarily due to lower activity in housing construction. In Austria, this effect is more pronounced than in the European environment due to the combination of increased mortgage interest rates and stricter lending guidelines.”

Strong earnings growth

In the first six months, Strabag achieved an operating result (EBIT) of €87.35 million – an increase of 37 percent compared to the same period last year. The growth in profits can be attributed primarily to the North + West segment, while the South + East and International + Special segments developed weaker. However, Strabag noted overall weak business in the South and East sector in the first half of the year. Major projects will lead to fluctuations in international business and private projects.

More employees

The construction group employed an average of 75,551 people in the first half of the year, 4 percent more than in the same period last year. This is due, on the one hand, to the acquisition of the German facility management services company Bockholt, and on the other hand, to mining projects in the Americas region for which additional staff have been appointed.