German construction giant blames Energiewende for gloomy outlook

Bilfinger, one of Germany’s largest construction groups, has delivered a third profit warning since June, and has apportioned some of the blame for its problems on the performance of its power division, which has been impacted by Energiewende.

Reuters reports that the company had re-evaluated risks and opportunities since its chief executive quit in August and added that a “fundamental reassessment of the situation” was needed in its power division, which accounted for about a third of Bilfinger’s 2013 earnings. “Earnings expectations for 2014 must be significantly reduced once again.”
The company had changed strategy to ease Bilfinger‘s exposure to price wars in the building sector but it failed to pay off as Germany‘s struggling big utilities, on which Bilfinger relied heavily, have cut back their spending on industrial services.

Bilfinger also announced on Wednesday that it would write down its investments in a plant that makes steel foundations for offshore wind turbines in Poland by about 30 million euros, which was not included in its adjusted earnings forecast.

Germany’s accelerated shift away from nuclear power and subsidization of green energy has impacted heavily on Bilfinger’s biggest customers, E.ON and RWE, and had a subsequent, negative knock-on effect on the construction group.

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