Bilfinger Posts Profit In Q3, Orders Down; Backs FY View; To Cut 200 Jobs

German engineering group Bilfinger SE (BFLBY.PK) reported Wednesday that its third-quarter net profit was 6 million euros, compared to prior year's loss of 1 million euros.

Adjusted net profit was 17 million euros, compared to 12 million euros a year ago. Adjusted earnings per share were 0.42 euro, compared to 0.30 euro last year.

Adjusted EBITDA climbed 59 percent from last year to 62 million euros.

Revenue grew 5 percent to 1.101 billion euros from prior year's 1.052 billion euros. Organic revenue growth was 7 percent.

Orders received, meanwhile, dropped 10 percent to 997 million euros, due mainly to project timing issues in the US and UK. Order backlog was down 7 percent to 2.62 billion euros.

Looking ahead, the company anticipates significant further development in the fourth quarter, noting that market demand remains stable at a high level despite the challenging global economic environment.

Further, Bilfinger reaffirmed its outlook for 2019, and forecasts organic revenue growth in the mid-single digit percentage range, compared to last year's 4.15 billion euros. For adjusted EBITA, the company continues to expect a significant increase to more than 100 million euros.

The company said the first indications for 2020 confirm significant further improvement in the adjusted EBITA margin.

In addition, Bilfinger announced that it will now transition its headquarters' role from 'strategic operator' to 'strategic architect', and will reduce headquarter staff, simplify the E&M division structure in Europe and reassign certain support functions.

Bilfinger expects to reduce its German based group SG&A and IT headcount by about 200 people.

The specific measures mainly include reduction from 4 to 3 Executive Board members, reduction of HQ staff by 40 percent and elimination of one management level in E&M Europe, among others.

Bilfinger expects that the combined effect will reduce SG&A already in the coming year by over 30 million euros. Further, a leaner operating model and the planned headcount reductions will ultimately reduce the annual SG&A run-rate to below 300 million euros by 2021.

Total 2020 SG&A savings will exceed 30 million euros contributing to the Company's 2020 planning for an adjusted EBITA margin of approximately 4 percent, in line with the expectations of the capital markets.

The company also said it will continue to divest non-core and low-margin business and seek accretive acquisition opportunities to support delivery of the generally confirmed target of a 5 percent adjusted EBITA margin.

However, this is only expected to be achieved towards the end of the coming year on a going forward basis.

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