May 29, 2009, 9:04 GMT
Vienna - Austria-based construction group STRABAG SE reported Friday that net losses in the first quarter widened by 59 per cent to 129 million euros (179 million dollars), owing largely to red-ink results from its income on interest.
STRABAG, one of the leading builders in Germany and Central and Eastern Europe, saw operating losses of 153 million euros, 10 per cent worse than in the first quarter last year.
Revenue grew by 18 per cent, to 2.08 billion euros, boosted by the acquisition of two German road construction firms in 2008.
As construction is a seasonal business, STRABAG typically makes a loss during the cold period, which is then compensated in later months.
Since the company's business volume increased in the first three months of 2008, the seasonal effect on operating profit, or earnings before interest and taxes, was more pronounced, STRABAG said in its quarterly statement.
While income from net interest had still made a positive contribution to profits in the first quarter of 2008, lower net liquidity and higher currency exchange losses added up to 26 million euros in net interest losses this year.
The group's order backlog stood at 12.85 billion euros at the end of March, a 2-per-cent increase from a year earlier.
STRABAG chief executive Hans Peter Haselsteiner said he did not share the budding optimism about economic recovery, but 'rather, we believe that the external factors will continue to develop negatively.'
Nevertheless, Haselsteiner said his company expected to end the year at the same levels as the last one, helped by economic stimulus programmes adopted by various governments. In 2008, STRABAG made a net profit of 157 million euros.
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