Germany's Hochtief slashes profit forecast, CEO quits
German construction group Hochtief on Monday cut sharply its 2011 forecasts after a profit warning from Australian unit Leighton, and said that its chief executive was stepping down.
Shares in Hochtief plunged 9.2 percent in Frankfurt.
Leighton on Monday slashed its net income forecast for its current financial year to a loss of Aus$427 million (312 million euros, $451 million). Previously it had expected a profit of Aus$480.
The warning was due mostly to problems with an airport link it is building in Brisbane, eastern Australia, and with a desalination project in Wonthaggi in Victoria in the south.
Leighton, in which Hochtief holds a 54-percent stake and which has been a major generator of profits for the German firm in recent years, intends to raise Aus$757 million in a capital increase to repair its tattered finances.
Hochtief said that it would fully subscribe to the share sale, meaning that its stake will be unchanged.
Hochtief said it now expects pre-tax profits in 2011 to be around half the 756.6 million euros ($1.1 billion) of 2010, down sharply from its previous forecast of around one billion euros.
Last month it had said that net profits would reach around 600 million euros for the year, but it now says only that they would "exceed" last year's 288.0 million euros.
Late Sunday Hochtief said in a separate statement that its long-serving chief executive Herbert Luetkestratkoetter was stepping down at next month's annual shareholders' meeting.
Luetkestratkoetter opposed a hostile takeover bid by Spanish giant ACS to create Europe's biggest construction group. ACS currently holds around a 39-percent stake and intends to raise this to more than 50 percent.
"During his term of office, Dr Luetkestratkoetter has always stood up with all his energy for the interests of the company, its shareholders and employees," Hochtief said in a statement.
Luetkestratkoetter will be succeeded by Frank Stieler, head of Hochtief's European operations.
© 2011 AFP