RATINGEN, Germany, Jan 10 (Reuters) - German builder Hochtief, controlled by Spain’s ACS, has a “rough path” ahead in a push to increase earnings, its new chief executive said.
“We will improve profitability,” Marcelino Fernandez Verdes told journalists. He said all shareholders would expect the company to pay a dividend, which it did not do in its last financial year.
“It will be a rough path but I am confident that we will make it,” the CEO said.
Verdes -- a close confidant of Florentino Perez, the CEO and Chairman of Spanish infrastructure group ACS -- in November replaced Frank Stieler, the last remaining board member from Hochtief’s pre-ACS days.
ACS had gained control of Hochtief in 2011 in a bid to become less dependent on its Spanish home market.
The appointment was seen as an attempt by indebted majority owner ACS to make its takeover pay off and also prompted some speculation that ACS wanted a more radical overhaul.
Hochtief, which also provides industrial services, has surprised with costly mishaps at risky construction projects and also had profit warnings at its Australian unit Leighton .
Business has perked up in the third quarter, when Hochtief posted higher than expected earnings and raised expectations for orders and sales in Asia and the United States.
Verdes said he planned to draw on Hochtief’s strong position in the U.S. market for roads, ports, schools and hospitals, many of which need to be upgraded.
For Leighton, he ruled out rapid business volume growth because costly delays at large projects in Asia in the past meant there was a need for a more careful assessment of risks. (Reporting by Matthias Inverardi.; Writing by Ludwig Burger. Editing by Jane Merriman)