PORR prelim. 3Q 20 - Major profit warning
Yesterday evening PORR released a major profit warning. Guiding for a pre-tax loss in the range of EUR -45-55 mn, there is a EUR 90-100 mn deviation to our most recent projection. Apart from company-specific problems at various projects, the group also claims a substantial (cost) burden stemming from the Covid-19 pandemic. It goes without saying that the news is a major setback in the companys effort to restore a track record. We note that 1) the group claimed, after the preceding profit warnings in former years, to have digest trouble making construction sites as well as older contracts with a low margin profile and flagged a higher quality backlog and 2) the reference to the Covid-19 impact is in contrast to its closest peer STRABAG that, despite very similar top line dynamics, reiterated its FY 20 margin target last week.PORR is engaged in the building construction, structural and civil engineering, road construction and infrastructure construction. Co. also operates the construction branches of planning, development, execution and operation. Co. also coordinates the supraregional activities of the construction branch subsidiaries. Co. is engaged in the contruction of buildings and industrial plants; revitalizing protected architectural treasures; general contractor services, project planning and development; railway construction; foundation engineering; power-plant, tunnel, underground rail and traffic route construction; environmental engineering and prestressing technology.
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