August 14, 2017 / 9:24 AM / 2 years ago

Bilfinger swings to second-quarter loss, hit by provisions for U.S. projects

BERLIN (Reuters) - German engineering services firm Bilfinger (GBFG.DE) reported a second-quarter operating loss on Monday, hit by provisions for U.S. projects as it undergoes a new phase of restructuring under Chief Executive Tom Blades.

Outside view of the Bilfinger SE headquarters in Mannheim, Germany, June 11, 2017. REUTERS/Ralph Orlowski

The Mannheim-based group is scrambling to adjust to upheavals in the energy industry that led to fewer petrochemical plants being built and serviced.

Last month it abandoned a target to improve operating profitability this year from last year’s 0.4 percent in its first profit warning under Blades, a former Linde LING.DE manager who took over a year ago.

It blamed the July profit warning on U.S. projects that were approved just before Blades took over in July 2016.

The adjusted second-quarter loss before interest, tax and amortization) of 43 million euros ($50.8 million) compared with a profit of 2 million euros a year ago with the result hit by risk provisions of 53 million euros for the U.S. projects.

“We are making good progress with the implementation of the strategy while the streamlining of the portfolio is proceeding according to plan,” Blades said in a statement.

Analysts said in notes on Monday that the numbers were in line with expectations.

Bilfinger’s shares were up 2.5 percent at 36 euros by 0740 GMT, when the MDAX <0#.MDAXI> index of medium-sized German companies was up 1 percent.

“We reiterate our view that the strategic turnaround will take time and the sluggish order intake certainly does not provide a positive catalyst,” Kepler Cheuvreux analysts wrote.

Bilfinger confirmed on Monday it aimed to break even at the adjusted EBITA level in 2017 and said it expected an upswing in order intake in the second half of the year. Order intake fell 4 percent in the second quarter.

The company also repeated its other full-year targets, for an organic increase in orders from last year’s 4.06 billion euros, and a medium to high single-digit percentage decline in output volume - the value of work done - from 2016’s 4.22 billion euros.

($1 = 0.8465 euros)

Reporting by Victoria Bryan and Georgina Prodhan; Editing by Maria Sheahan, Greg Mahlich

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