Germany's Hochtief slashes profit forecast, CEO quits

11th April 2011, Comments 0 comments

German construction group Hochtief on Monday slashed its 2011 profit forecast, because of problems at its Australian unit Leighton, and said that its chief executive was stepping down.

Shares in Hochtief plunged some 6.6 percent in Frankfurt.

Hochtief said that it now expects pre-tax profits in 2011 to be around half the 756.6 million euros ($1.1 billion) of 2010. Its previous forecast was for pre-tax profits to increase to around one billion euros.

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

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

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