In the HOCHTIEF Real Estate division, HOCHTIEF Property Management secured several major contracts, among other things with aurelis Real Estate now entrusting management of its entire portfolio to HOCHTIEF from January 2009. This makes us the largest property manager in Germany. In the third quarter, our real estate development company HOCHTIEF Projektentwicklung began construction of Lindley Carrée in Hamburg, an office building designed along sustainable principles.
In the HOCHTIEF Services division, we secured a contract in October from Siemens to operate a large number of German locations for a further six years. The relationship between HOCHTIEF and Siemens is a best practice model of how to succeed at outsourcing: We have served the technology group as facility managers since taking over parts of its facility management activities in 2004, integrating 1,500 employees into our workforce.
The sustained upward trend in orders through the third quarter is a further striking illustration of the Group's growth. New orders to September 30, 2008 reached EUR 19.51 billion, up 22.6 percent on the prior-year period. Most of the increase came from HOCHTIEF's international operations, with major contracts in the Asia-Pacific region and a growing influx of orders at HOCHTIEF Americas. In Germany, new orders came to EUR 1.92 billion – down 20.1 percent from the comparative period, as planned. Most of the decrease is accounted for by the German building construction business.
Work done to the end of the third quarter amounted to EUR 15.77 billion, up 15.4 percent on the comparative 2007 figure. HOCHTIEF's international activities showed a 15 percent rise in work done due to a surge in output at HOCHTIEF Asia Pacific and HOCHTIEF Americas. An 18.4 percent increase in Germany was mostly generated by HOCHTIEF Real Estate, HOCHTIEF Services and HOCHTIEF Concessions.
The Group order backlog swelled to EUR 32.73 billion, an increase of 20.7 percent and an all-time record for HOCHTIEF. Adjusted for the unfavorable exchange rate effect (a negative impact of EUR 1.83 billion) as of the September 30 reporting date, the order backlog came to EUR 34.56 billion (up 27.4 percent).
HOCHTIEF also has outstanding earnings figures to present for the period under review. Operating earnings improved by EUR 205.4 million compared with the prior-year period, from EUR 344.1 million to EUR 549.5 million. We boosted profit before taxes by EUR 72.2 million, from EUR 343.1 million to EUR 415.3 million. And we improved consolidated net profit by 48.8 percent compared with the same period of 2007, from EUR 70.7 million to EUR 105.2 million.
The continued growth of our company necessitated EUR 1.07 billion in capital expenditure on property, plant and equipment and financial assets. This was not as much as the comparative 2007 figure, however, due to an exceptionally large capital investment program amounting to EUR 1.4 billion in the first three quarters of 2007. Group expenditure on property, plant and equipment and intangible assets came to EUR 678.2 million, up from EUR 504.8 million in the prior-year period. The lion's share of this spending went on the capital-intensive mining business as well as plant and equipment needed to carry out large infrastructure projects in the HOCHTIEF Asia Pacific division. Investment spending on financial assets was down as planned to EUR 386.9 million, compared with EUR 893.5 million in the prior-year period. This was largely due to the acquisition of a 45 percent stake in the Al Habtoor Leighton Group for roughly EUR 520 million in the third quarter of 2007.
Group outlook
Despite the current turbulence on international financial markets and its current impact on the real economy, we are once again raising our forecast for new orders and the order backlog in fiscal 2008 and expect that these two figures will be no longer on a par with the high prioryear level but will exceed it. For the remaining measures of performance, we reaffirm the increased forecast announced with the half-year results and expect for fiscal 2008:- Group sales to top the record level achieved in 2007
- Pretax profit above the high level achieved in 2007
- Consolidated net profit in excess of the prior-year figure.
Dr.-Ing. Herbert Lütkestratkötter
