BAM Group, one of the largest construction groups in the world, has issued a profit warning due to a 'dramatic drop' in the results of one of its German units. 'Despite the favourable operating results from its other activities, BAM expects that it will be unable to achieve its profit forecast of approximately EUR 180 mln for 2006 as announced when the half year figures were presented,' the Netherlands-based company said in a statement on Monday.
BAM Group, one of the largest construction groups in the world, has issued a profit warning due to a 'dramatic drop' in the results of one of its German units. 'Despite the favourable operating results from its other activities, BAM expects that it will be unable to achieve its profit forecast of approximately EUR 180 mln for 2006 as announced when the half year figures were presented,' the Netherlands-based company said in a statement on Monday.
Ahead of the publication of its results for the first nine months of the year on November 30, BAM said the 2006 loss forecast of German non-residential building company Wayss & Freytag Schlüsselfertigbau has been raised to EUR 115 mln. This consisted of EUR 55 mln for losses on projects and operations, EUR 50 mln for claims and guarantee obligations and EUR 10 mln restructuring charges. The profitable Müller Altvatter (non-residential construction) will take-over the loss-making Wayss & Freytag Schlüsselfertigbau, the statement said.
BAM said it was reducing its FY06 outlook for net profit form EUR 180 mln to EUR 130 mln. This also included a EUR 30 mln positive one-off due to lower taxes in the Netherlands and lower pension obligations. BAM said it will leave FY06 dividend at EUR 0.40 (equal to FY05 dividend per share).
The news caused BAM to drop 13.07% to EUR 14.17 in early trading on the AEX stock exchange in Amsterdam.
