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Porr: Capital Increase and Rise in Profits Expected

Published: October 7, 2013; 13:26 · (Vindobona)

CEO of listed Austrian construction company Porr Karl-Heinz Strauss is still in favor of a capital increase in 2014 or 2015 and calls upon the government to create “projects for the future”.

Porr: Capital Increase and Rise in Profits Expected / Picture: © Porr AG

In an interview with “Kleine Zeitung” Strauss announced that even after the capital increase both him and his partner Klaus Ortner intend to hold “at least 51 percent” of the company. Currently they hold a joint stake of 70 percent. Strauss expects a significant improvement in profits in 2013 after last year’s profits of € 18m.

“We expect a substantial improvement still this year and we are on target,” the CEO announced and rejects the idea of a crisis in the construction industry in Austria. There is still growth of 0.6 percent in Austria in spite of the construction industry’s decrease in performance of 2.8 percent in Europe. However, recovery packages by the government are only a drop in the ocean, according to Strauss: “In the end it is all the same again,” he said. According to him, the Austrian highway operating company Asfinag, the Austrian Railways (ÖBB) as well as the provinces and municipalities are supposed to realized the planned projects. Moreover, building construction activity of private persons and enterprises should be encouraged by tax incentives.

Strauss expects the new government to consist of the “best minds, but with power so that they can realize things.” The construction company’s CEO announced that “provided if something positive will develop” he was willing to accept a higher top tax rate of ten to fifteen percent for the next two to three years. However, he pointed out that the government had to create “projects for the future”.

In regard to Porr’s former competitor Alpine, Strauss considers the bankruptcy to have effects on the construction company even next year. “We will feel the problems even in 2014,” he said. The CEO refuses to believe that of all 4,900 former employees of Alpine only 130 are looking for a job. Instead, he counts on the situation to deteriorate. “This will make the fight for the margins, which Alpine has messed up, only more dramatic. The market will be adjusted further,” Strauss announced. Still, the construction company is satisfied with the take-over of Alpine as the country has integrated almost 800 persons into Porr, who will stay on permanently.

This year, Porr’s affiliate Strauss&Partner will sell real estate in the amount of more than € 100m, according to general manager Claus Stadler. Only recently Porr announced having landed two contracts for Swedish furniture giant Ikea in North Poland for a total volume of € 150m. On an area of 90,000 square meters, Porr will establish the multi-functional building compex “Gdynia Waterfront” for Ikea Group in Gdynia at the East Sea wich will comprise apartments and business areas. In the first phase of construction, around € 40m will be invested.

Moreover, “Ogrody Shopping Center” of real estate developer CBRE Global will be enlarged from 17,500 square meters to 40,000 square meters. The volume of orders is € 65m, as announced by Porr in late September.