In This Article:
Release Date: August 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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STRABAG SE (WBO:STR) reported the highest net income ever achieved in the first half of the year, driven by strong net interest income and a robust liquidity position.
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The company achieved a record order backlog exceeding EUR25 billion, providing good visibility towards 2026.
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There was a dynamic development in order intake, particularly in infrastructure, energy transition, and refurbishment projects across Europe and the Americas.
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The company's balance sheet and cash position remain very robust, with a healthy net cash position of EUR1.6 billion.
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STRABAG SE's strategy to become a general contractor for decarbonization is progressing, with acquisitions in MEP and energy management companies to support this goal.
Negative Points
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The residential construction market remains challenging, particularly in Austria and Germany, with no significant turnaround expected before 2025.
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EBIT was slightly lower than the previous year due to higher depreciation and amortization expenses.
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The output volume in Austria declined significantly due to stricter lending guidelines for mortgage loans and a lack of major industrial projects.
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The order backlog decreased in Austria, Hungary, and the UK, with ongoing completion of major projects in the UK contributing to the decline.
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Cash flow from operating activities returned to negative, primarily due to an increase in inventories and receivables.
Q & A Highlights
Q: Can you elaborate on the challenges faced in the residential construction market, particularly in Austria and Germany? A: Klemens Haselsteiner, CEO, explained that the residential construction market remains challenging, especially in Austria and Germany, due to stricter lending guidelines for mortgage loans and a lack of major industrial projects to offset declines. The Austrian government's housing package is expected to have a delayed impact, with no significant turnaround anticipated before 2025.
Q: How is STRABAG SE addressing the shift from private to public sector contracts? A: The CEO noted a significant shift towards public sector contracts, now at 70% compared to 60% previously. This shift is helping balance out diversified developments, and with lower interest rates, the trend is expected to ease, supporting a more balanced customer structure.
Q: What are the key drivers behind the record order backlog exceeding EUR25 billion? A: The CEO highlighted successful project acquisitions in infrastructure, energy transition, and refurbishment projects, particularly in Europe and the Americas. This growth reflects a dynamic development in order intake and provides good visibility towards 2026.