Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

EARNINGS POLL-BAM 9-mths profit seen flat, outlook in focus

Published 11/24/2008, 02:43 AM
Updated 11/24/2008, 02:46 AM

* BAM 9-months results

* Thursday, Nov 27, 0700 GMT

* Net profit seen at 194 million euros, focus on outlook

By Aaron Gray-Block

AMSTERDAM, Nov 24 (Reuters) - Dutch builder Royal BAM Groep is expected to report on Thursday flat nine-month net profit, but the focus is squarely on the company's outlook amid the swiftly deteriorating economic climate.

The company is seen reporting net profit attributable to shareholders of 194 million euros ($243 million), according to the average forecast from a Reuters survey of six analysts. Estimates ranged from 184 million to 201 million euros.

BAM, the largest Dutch construction group, reported net profit of 192.6 million euros in the same period last year.

At its first-half results in August, BAM raised its 2008 profit outlook to at least 260 million euros.

Petercam analyst Paul Linssen said that although he expects BAM to reiterate the outlook this week, it doesn't exclude a change in the business environment.

"In the past few months, the economic climate further worsened and we therefore anticipate a cautious tone from management," Linssen said in a note.

The Dutch construction organisation EIB warned recently that residential and non-residential construction would see a 10 percent decline in production in 2009 and 2010.

Analysts at SNS Securities also expect a strong impact on order intake for both BAM and its Dutch rival Heijmans, noting that both residential and non-residential project developers are cancelling more and more plans.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Heijmans, which is uncertain of meeting its full-year debt covenants after a series of profit warnings, said in October second-half sales had come under pressure due to reduced house sales and a more selective contracting policy.

But Petercam, which rates BAM "add", said BAM's business diversity and geographic exposure, with operations in Belgium, the UK, Ireland and Germany, makes its less vulnerable to weakness in one area or segment.

BAM shares have fallen about 60 percent since its inclusion in the Amsterdam blue chip index at the start of September, while the AEX has fallen 46 percent.

It trades at 2.4 times forecast 2009 earnings, compared with Heijmans' 4.6 times and Ballast Nedam's 4.7 times.

Following is a breakdown of analyst forecasts in millions of euros:

Average Range Previous No of

f'casts 9-mths Sales 6,514 6,301-6,671 6,424 6 9-mths Net Result 194 184-201 193 6

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.