Royal Imtech NV (IMTEF.PK), a provider of technical services in various fields, Tuesday said it had a difficult first quarter and announced a reorganisation that includes elimination of 1,300 jobs, particularly in the Netherlands and Germany.
Gerard van de Aast, CEO, said, ''The last quarter was a turbulent and difficult one for Imtech...Imtech has worked to restore the situation in serving our markets as quickly as possible and it is positive that our order book remains on level. Some of our markets remain difficult to some extent.''
Considering the difficult market conditions in the Netherlands, the company has decided to implement a reorganisation to strengthen the competitiveness and profitability of its companies in the country. This is mainly related to capacity reductions in the office buildings market and the Infra business.
As part of this reorganisation, a cost-savings and an efficiency program has begun in Germany. The planned personnel and cost reductions are expected to further support the German operations' effectiveness and profitability.
Imtech plans to implement various smaller efficiency programs in several other Imtech companies, depending on the market and company conditions.
The total expected reorganisation charges in 2013 will amount to about 80 million euros. Imtech will consult the Works Council and trade unions regarding implementation of the reorganisation plan.
The order book totaled 6.4 billion euros compared to 6.4 billion euros at the end of the fourth quarter of 2012.
The engineering firm, which is investigating irregularities in Poland and Germany, said the write-off in Germany appears to be larger than originally expected and is now estimated to total around 220 million euro. As previously indicated, the expected write-off in Poland will amount to 150 million euros.
The company said Ernst & Young investigated the functioning of the current management model and the probe confirmed that the development of risk management did not stay on an equal footing with the size and complexity of the organisation. The company said it has already begun a search to expand the Board of Management by two people.
Imtech said it would take more time than previously indicated to conclude investigations in Poland and Germany and hence to finalise and audit the annual accounts for 2012. The company has scheduled publication of the full-year 2012 figures for early June.
The stock fell 1.47 percent on Monday to settle at 8.89 euros.
For comments and feedback: editorial@rttnews.com