Hochtief shares dragged down by Leighton woes

7th April 2011, Comments 0 comments

Shares in the biggest German construction group, Hochtief, plunged in early trading Thursday after it warned of a negative impact on 2011 results from problems at its Australian unit Leighton.

Hochtief shares showed a loss of 6.25 percent to 71.25 euros, while the MDax index on which they are listed was 0.19 percent lower overall.

Late Wednesday, Hochtief said it expected "significant negative effects" on its 2011 results after asking that trading in Leighton's shares be suspended in Australia until Monday at the latest.

Hochtief said it needed to amend Leighton's 2011 earnings targets, and that its own earnings for this year would likely be affected as well.

On March 23, Hochtief forecast a pre-tax profit of around one billion euros ($1.42 billion) this year, compared with 757 million in 2010, and a net profit of 600 million euros, up from 288 million.

Leighton, which is one of Hochtief's most profitable subsidiaries, has run into problems with the Airport Link project in Brisbane, eastern Australia.

The underground highway is estimated to cost about four billion Australian dollars, or 2.8 billion euros.

Hochtief is the target of an unfriendly takeover bid by a major shareholder, the Spanish construction company ACS, which seeks to create Europe's biggest construction group.

© 2011 AFP

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