BUSINESSHIGHLIGHTS
UK
Further Balfour Beatty
profit warning
Thirdprofitwarning infivemonths as abuyer is
found for ParsonsBrinckerhoff and the chairman
announces plans to stepdown
B
alfour Beatty has announced its third profit warning in five months.
It says it now expects a UK£ 75 million (US$ 125 million) profit
shortfall in itsUKConstruction Services business.Trading across the
rest of the company is said to remain in linewith expectations.
The Group has appointed KPMG to undertake a detailed independent
review of theConstruction ServicesUK contract portfolio. It said the review
will focus on commercial controls, on ‘cost to complete’ and contract value
forecasting and reporting at project level. KPMG is expected to report back
to theBoardby the endof the year.
Executive chairman Steve Marshall said, “This latest trading statement is
extremely disappointing. There has been inconsistent operational delivery
across some parts of theUK construction business and that is unacceptable.
Restoring consistencywill take time and it has our full focus.”
The company also said Mr Marshall has announced plans to resign as
chairman from the Balfour Beatty board. He said he will step down when
there is a newCEO in place – the appointment of which is said to be “at an
advanced stage” – and a newnon-executive chairmanhas been identified.
Parsons Brinckerhoff sale
In other news, the company has said it will sell its US-based professional
services division, Parsons Brinckerhoff, toWSPGlobal forUK£820million
(US$ 1.37 billion). Balfour Beatty said in May that it planned to sell the
business, following its first profitwarning.
The deal will seeUK£ 200million (US$ 335million) returned to Balfour
Beatty’s shareholders through a share buy-backprogramme.
MrMarshall said, “The board believes the sale price of UK£ 820million}
(US$1.37billion)deliversbothasignificant returnonouroriginal investment
and a compelling level of value creation for shareholders -which remains the
key focus of the board.”
BalfourBeatty acquiredParsonsBrinckerhoff in2009 forUS$626million.
INDIA
Cement
divestments
Indian conglomerate Jaiprakash
Associates (Jaypee) has agreed to
sell a 1.5 million tonnes per year
cement grinding plant inPanipat to
ShreeCement.Thedeal,worth INR
360 Crore (US$ 60 million) is the
latest ina seriesofdivestments in the
cement sector by Jaiprakash.
Its biggest sale in this area was
announced a year ago, when it
agreed to sell a facility in Gujarat
state comprising a 2.4 million
tonnes per year cement plant and
2.4million tonnes per year grinding
plant to UltraTech for INR 3,800
crore (US$625million).
Jaypee has also agreed to sell its
74% stake inBokaro JaypeeCement
Limited, a cement joint venture
with the steel Authority of India to
DalmiaCement for INR 6.9 billion
(US$115million).
GERMANY
Bilfinger distress
Bilfinger has issued its third profit
warning in three months, as it
faces competition within a growing
sustainable energy sector. The
statement follows Roland Koch’s
resignation as its Executive Board
chairman amid previous profit
downgrades resulting in former
head, Herbert Bodner, being
appointedCEOon an interimbasis.
Its forecast earnings before tax for
this year are€270million (US$350
million), against€419million (US$
545million) in2013.
UK
Hanson spin-off
Heidelberg Cement has moved
ahead with its plan to sell part of
its building products business, with
steps that could lead to an initial
public offering (IPO) in Hanson
BuildingProducts.
Heidelberg has filed a registration
statement with the US Securities
and Exchange Commission (SEC)
for a potential IPO of ordinary
shares. At this stage the number of
shares to be offered and the price
range have not been announced.
VALUEOF 1:
Symbol AU$
BRL
UK£ CNY
€
INR
YEN MXN RUR SAR
ZAR KRW CHF
US$
AustralianDollar
AU$
0.47 0.540 5.39 0.691 53.9
96
11.84 34.6
3.29
9.91
927 0.834 0.877
BrazilianReal
BRL
2.12
0.255 2.54 0.326 25.4
45.2
5.58
16.3
1.55
4.67
437 0.393 0.413
BritishPound
UK£
1.85
3.93
10.0
1.28
99.8
178
21.9
64.1
6.09
18.3
1716 1.54
1.62
Chinese Yuan
CNY
0.185 0.393 0.100
0.128 10.00 17.8
2.20
6.42 0.610 1.837
172 0.155 0.163
Euro
€
1.45
3.07
0.78
7.80
78.0
139
17.1
50.1
4.76 14.34 1341 1.21
1.27
IndianRupee
INR
0.019 0.039 0.010 0.100 0.013
1.8
0.220 0.642 0.0610 0.184 17.2 0.0155 0.0163
Japanese Yen
YEN
0.010 0.022 0.006 0.056 0.007 0.562
0.1233 0.361 0.0343 0.1032 9.7 0.0087 0.0091
MexicanPeso
MXN
0.084 0.179 0.046 0.456 0.058 4.56
8.11
2.93 0.278 0.837
78
0.070 0.0741
RussianRuble
RUR
0.029 0.061 0.016 0.156 0.020 1.56
2.77 0.342
0.095 0.286 26.8 0.0241 0.0253
Saudi Riyal
SAR
0.304 0.645 0.164 1.640 0.210 16.400 29.187 3.600 10.533
3.01
282 0.254 0.267
SouthAfricanRand ZAR
0.101 0.214 0.055 0.544 0.070 5.442 9.686 1.195 3.496 0.332
94
0.084 0.088
SouthKoreanWon KRW
0.0011 0.0023 0.0006 0.0058 0.0007 0.0582 0.1035 0.0128 0.0374 0.0035 0.0107
0.00090 0.0009
Swiss Franc
CHF
1.20
2.54
0.65
6.47
0.83 64.67 115.09 14.20 41.54 3.94 11.88 1111
1.052
USDollar
US$
1.14
2.42 0.616 6.15 0.788 61.5 109.5 13.5
39.5
3.75
11.3
1057 0.951
For exampleUS$ 1=AU$ 1.14
Exchange rates: September 2014
GERMANY
Daimler has exercised
a put option to sell its 50% interest in
Rolls-Royce Power Systems (RRPS) to
Rolls-Royce for
€
2.43 billion
(US$ 3.16 billion). RRPSwas previously
known as Tognum andmakes engines
for construction equipment applications
under theMTU brand.
CHINA
Revenues at ChinaRailway
Constructionwere up+10.9% in the
first half of the year toCNY 262 billion
(US$ 42.6 billion). The contractor’s
net profit was up+2.3% toCNY 4.65
billion (US$ 755million) for a 1.8%
margin. The company’s backlog as
of the end of June 2014 stood at CNY
1,798 trillion (US$292 billion), and the
company's order intake for the first half
was CNY 390 billion (US$ 63.4 billion).
SPAIN
The EuropeanCommission
has given clearance for Cemex’s
acquisition of Holcim’s Spanish
operations. The assets include a range
of aggregates, quarrying and cement
production facilities. The decision
follows an investigation launched in
April intowhether effectively removing
Holcim fromSpainwould adversely
affect competition in the country.
RUSSIA
Lafarge has sold its
UralCement business toBuzzi
Unicem’swholly-owned subsidiary
Dyckerhoff for
€
104million (US$
135million). The business comprises
a 1.1million tonnes per year cement
plant inKorkino, 40 km in the south of
Chelyabinsk. Lafarge sold the business
to reduce debt.
international
construction
october 2014
BUSINESSNEWS
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