Trams construction firm Bilfinger eyes profit rise

By PETER DINKLOH
Published on 01/09/2012 00:00

GERMAN industrial giant Bilfinger Berger, part of the consortium building Edinburgh’s troubled trams project, expects operating profits to rise over the next four years as it shrugs off the eurozone debt crisis.

Chief executive Roland Koch, the former leader of the German regional state of Hesse, said: “We do not see signs of a recession when it comes to new orders, that’s a very clear picture.”

Koch’s comments run counter to expectations from analysts, who on average expect a dip in operating profit next year to €435 million (£345m) from €438m this year.

His optimism also contrasts with forecasts from some economists for gross domestic product in Germany, Bilfinger’s largest market, to fall this quarter and for the country to retreat into recession later this year.

Koch said factories serviced by Bilfinger north of the Alps, the region less hit by the eurozone crisis, are running at full steam. Demand at Bilfinger’s industrial services unit, the company’s largest and second-most profitable division, is unabated, he noted, but customers are haggling harder. He added: “It takes more intelligence and creativity on our part to maintain our profitability.”

The company has been reducing its more-risky construction operations in favour of maintaining buildings, industrial plant and power stations.