Porr Quartalsbericht_2_05_engl - PORR AG

REPORT ON THE FIRST SIX MONTHS 2005

KEY DATA FOR THE
PORR GROUP
Values in million € First half 2005 Change First half 2004
Group output 919.4 21.2% 758.3
of which domestic 621.7 20.9% 514.3
of which foreign 297.7 22.0% 244.0
Foreign share of total output in % 32.4 + 0.2PP 32.2
Total order receipts 1,172.9 66.0% 706.4
of which domestic 875.6 85.0% 473.4
of which foreign 297.3 27.6% 233.0
Total order balance 1,756.8 51.3% 1,161.4
for the rest of the current year 1,014.3 44.6% 701.4
for subsequent years 742.5 61.4% 460.0
Domestic order balance 1,152.9 43.2% 805.1
for the rest of the current year 655.3 26.3% 518.8
for subsequent years 497.6 73.8% 286.3
Foreign order balance 603.9 69.5% 356.3
for the rest of the current year 359.0 96.6% 182.6
for subsequent years 244.9 41.0% 173.7
Average staffing level 9,526 7.7% 8,845
of which blue-collar workers 6,196 7.6% 5,760
of which salaried employees 3,330 8.0% 3,084
Staffing level at end of quarter 10,634 5.8% 10,049
of which blue-collar workers 7,282 4.8% 6,948
of which salaried employees 3,352 8.1% 3,100

LETTER TO THE SHAREHOLDERS
FIRST HALF OF 2005
DEAR SHAREHOLDERS,
During the second quarter of the current year, we consistently pushed ahead with our
strategies as regards acquisition and improvements to liquidity. In spite of rising output in the
second quarter, we succeeded in maintaining an order balance of around €1,750 million,
close to the healthy level achieved at the end of quarter one. New orders in the quarter
under review reached a highly satisfactory total of around €630 million; combined
with the promising nature of current contract negotiations, an impressive total for the
year as a whole is already assured. This assertion was confirmed by the latest forecast for
the year which predicted output of around €2,200 million (compared to €1,854 million
in 2004).
We are also making good progress as regards improvements to our finance structure.
Liquid funds from the structured bond with a value of €72 million issued as a private
placement were received on 29 th April. The corporate bond of €100 million offered for
subscription from 22 nd to 24 th June was quickly oversubscribed, with high demand
particularly evident in the retail sector. At the same time, UBM successfully issued a
bond (also with a value of €100 million) which enabled it to cover its obligations to
PORR following deconsolidation. This in turn enabled us, following additional measures in
the project/cost management area, to reduce our payables due to banks from over €800
million in the first instance to less than €300 million. The consequence of this is not only
better specific financial values for any potential rating processes, but also much greater
scope for investment. This will allow us to exploit opportunities on all markets – which are
already considerable, especially in the CEE states – even more effectively in future.
Demand levels on the markets on which we are active are developing extremely well.
This is increasingly helping us to ensure sufficient profitability by means of selective
acquisition, even though prices and quantities have parted company, i.e. supply and
demand are no longer in equilibrium. As a result, we have so far managed to avoid passing
on to customers the exorbitant price rises in oil products and steel to a large extent.
Prices are likely to recover if the Federal Republic of Germany can achieve an economic
upturn in 2006.
One obstacle that remains is the unacceptable stance of the public sector in terms
of awarding contracts: despite verbal assurances that the best supplier will prevail, in
practice contracts nearly always go to the cheapest supplier.
1

ACQUISITION OF 100% SHAREHOLDING IN WIENER BETRIEBS- UND BAUGESELLSCHAFT M.B.H.
(WIBEBA)
Having acquired a 100% shareholding in Wiener Betriebs- und Baugesellschaft m.b.H. (WIBEBA)
from B & C Baubeteiligungs GmbH in March 2005 (with retroactive effect to 1 st January 2005),
the values for WIBEBA have been incorporated in the following quarterly figures.
OUTPUT
As of key date 30 th June 2005, the production output of the PORR Group stood at €919.4
million, 21.2% (equivalent to €161.1 million) above the comparable figure for the previous
year. Initial consolidation of the company WIBEBA accounted for €51.4 million; organic
growth in production output was around 14.5%. Compared to the same period last year,
significant rates of increase (exceeding 20%) were achieved, both domestically (where
production output stood at €621.7 million, thereof WIBEBA €51.4 million) and abroad
(€297.7 million).
Development in the various building construction and civil
engineering divisions was very uneven. Whereas building
construction continued to combat a mild downturn in the
first half of 2005, the highly dynamic progress of previous
periods was maintained in the civil engineering area and
high rates of expansion were recorded. Although higher
production output was achieved in the building construction
areas of residential buildings and industrial construction,
this did not fully compensate for downward trends in office
and commercial premises construction. This picture
contrasted with that for civil engineering, where output
increased in all major divisions, in some cases considerably.
Tunnel construction, for example, returned an increase of
52.5% to €33.7 million; road construction expanded by
48.9% to €169.3 million.
DISTRIBUTION OF FOREIGN OUTPUT BY COUNTRY
IN FIRST HALF IN MILLION €
100
75
50
25
0
Czech
Republic
2004 2005
Germany Hungary Poland Switzerland
Others
In this table showing foreign output, “Others” for the first half of 2005
refers to the combined totals for Bosnia-Herzegovina, Croatia, Slovakia and
Slovenia (“Others” for 2004 were Croatia, France, Slovakia and Slovenia).
As of key date 30 th June 2005, the foreign share of operating performance for the PORR
Group stood at 32.4%, virtually unchanged from the previous year’s value. When adjusted to
take account of the initial consolidation of WIBEBA, which is active solely on the domestic
market, the foreign share for the first six months of 2005 amounts to 34.3%. However, the
current structure of the order balance continues to suggest that foreign share for 2005 as a
whole is likely to exceed 35%. During the first half of 2005, the Czech Republic (down 2.7%
to €73.9 million) took the place of Germany for the first time as the most important foreign
market. In Germany, the decline in production output (down by 28.2% to €73.5 million)
linked to the general economic situation continued throughout the second quarter. Massive
increases in output were achieved in Hungary (€61.1 million on the basis of construction
activities on a section of the M6 motorway) and Poland (€44.9 million thanks to a number of
major orders in the areas of residential buildings and industrial construction).
CURRENT ORDERS SITUATION
When compared to the first quarter of 2005, the order balance for the PORR Group at the end
of the first six months of 2005 was virtually stable at the healthy level of €1,756.8 million.
Of this, WIBEBA accounted for €56.6 million. An increase of 51.3% on the figure for the
previous year was achieved. Of the order balance as a whole, a total of €1,014.3 million is
due for performance in 2005 (+44.6%).
Long-term orders amounting to €742.5 million (+61.4%) have ensured a sound order balance
for the years ahead. The PORR Group’s long-term strategy of consistently expanding the
foreign share is also reflected in the structure of the order balance. Approximately 34% of
orders on hand (€603.9 million) were linked to projects on foreign markets, a rise of 69.5%
compared to the same figure for last year. With the exception of Germany, where a 36%
2

decrease on the previous year’s value was
sustained, strong rates of increase were
noted on all major markets. In the Czech
Republic, the satisfactory development of
TEERAG-ASDAG subsidiary PSVS and a
number of large-scale housing and industrial
construction orders boosted the order balance
by 44.6% to €144.9 million. The market
presence of the PORR Group in Hungary
DISTRIBUTION OF FOREIGN ORDERS ON HAND
BY COUNTRY AS OF 30 TH JUNE IN MILLION €
Czech
Republic
expanded hugely thanks to the “Autopalya M6” contract and the “Europe Tower” construction
project; as of key date 30 th June 2005, the construction volume stood at €117.5 million.
In Poland, the order balance tripled to €104.2 million on account of major housing and
industrial construction orders. Significant rates of increase were also recorded in Switzerland
and Croatia, even though these were achieved from a lower base level.
In the PORR Group’s building construction division, large-scale orders in the areas of residential
buildings, office and commercial premises construction and industrial construction prompted
a rise in the order balance to around €700 million, a 70% improvement on the previous year’s
value. In the civil engineering sectors, contracts linked to railway and track construction as
well as road and tunnel construction pushed the order balance up to a comfortable level of
around €880 million, an increase of 51% compared to last year.
New orders of €1,172.9 million in the PORR Group for the first half of 2005 exceeded the
previous year’s level by 66%.
PERSONNEL
The average staffing level for the PORR Group in the first six months of the reporting period
stood at 9,526, of which 3,330 were salaried employees and 6,196 were blue-collar workers.
This represents a rise of 7.7% compared to the previous year. Adjusting the figure in respect
of the first inclusion of WIBEBA employees (719 on average, of which 573 are blue-collar
workers and 146 are salaried employees) produces a decrease of 0.4%. The average qualification
and educational level of employees has also improved in response to the increasingly
complex nature of construction projects.
200
150
100
50
0
2004 2005
Croatia
Hungary Germany Poland Switzerland
Bosnia-
Herzegovina
Others
In this table showing foreign orders on hand as of 30 th June 2005, “Others” refers to the combined
totals for Slovakia and Slovenia (“Others” for 2004 were France, Slovakia and Slovenia).
MAJOR NEW ORDERS RECEIVED BY THE PORR GROUP IN SECOND QUARTER 2005
Construction of stadium in Klagenfurt for EURO 2008, by Porr Technobau und Umwelt AG
Construction of additional level and renovation of the existing Salzburg stadium for EURO 2008, by Porr Technobau und Umwelt AG
Construction of additional level and renovation of the existing Innsbruck stadium for EURO 2008, by Porr Technobau und Umwelt AG
Technical safety modernisation of Arlberg railway tunnel in Langen am Arlberg, by Porr Technobau und Umwelt AG
Construction of research building as general contractor in Vienna’s 9 th municipal district, by Porr Projekt und Hochbau AG
Construction of Pantucekgasse passive house residential complex as general contractor in Vienna’s 11 th municipal district, by Porr Projekt und Hochbau AG
Construction of Schrailplatz residential complex as general contractor in Vienna’s 23 rd municipal district, by Porr Projekt und Hochbau AG
Construction of Münster social centre in Tyrol as general contractor, by Porr GmbH
Construction of Chodov SO 08 office building in Prague, by Porr (Česko) a.s.
Construction of Smichov Gate office building in Prague, by Porr (Česko) a.s.
Construction of Arkadia Wroclawska office complex in Wroclaw, by Porr (Polska) S.A.
Construction of residential complex and Domna Skarpie office/commercial facility in Warsaw, by Porr (Polska) S.A.
Turnkey construction of residential complex in Riem district of Munich, by Porr Aktiengesellschaft
Construction of a sewage disposal channel and pump shafts in Jagerberg, Steiermark, by TEERAG-ASDAG AG
Construction of foundations for a wind power station in Mistelbach, Lower Austria, by TEERAG-ASDAG AG
Asphalting work linked to B70 expansion in Wolfsberg, Carinthia, by Baugesellschaft m.b.H. Erhard Mörtl
Construction of Ostroleka city by-pass in Poland, by TEERAG-ASDAG POLSKA SP. Z.O.O.
Construction of Erlaaerstrasse residential complex in Vienna’s 23 rd municipal district, by Wiener Betriebs- und Baugesellschaft m.b.H.
Construction of Brüder Albert Gasse residential complex in Vienna’s 23 rd municipal district, by Wiener Betriebs- und Baugesellschaft m.b.H
3

INVESTMENTS
During the first half of 2005, the PORR Group invested approximately €12.0 million in
tangible fixed assets, €7.0 million less than in the same period last year. The investment
volume for 2005 as a whole is also expected to fall short of last year’s figure.
EARNINGS SITUATION
During the second quarter of 2005, the PORR Group raised its operating performance
compared to the previous quarter, returning an EBT according to IFRS of €1.0 million
(compared to €0.5 million in the same period of the previous year). Development in road
construction and civil engineering was particularly satisfactory, although results continue
to be adversely affected by the slight downturn in building construction.
OUTLOOK FOR 2005
The latest forecasts for 2005 continue to predict annual construction output of around
€2,200 million for the PORR Group. Thanks to the currently high level of orders on hand
and the performance rendered during the first six months of the year, the acquisition
requirement for the second half of the year has been reduced. The forecasts are therefore
almost certain to be met. Foreign output is likely to increase to 35% by the end of the year.
The measures taken to improve the earnings situation in the operating and overhead costs
areas continue to produce encouraging results. The continuance and expansion of these
initiatives will have a positive impact on revenue development in 2005 and the years ahead.
DEVELOPMENT OF PORR SHARES
During the second quarter, international share markets ceased to progress along parallel
lines as they had in recent months, and development became increasingly uneven. Whereas
capital markets in the USA and Japan became locked into a sideways drift, share markets
in Europe maintained a generally upward trend. The ATX, the leading index of the Vienna
Stock Exchange, increased in value by over 25% during the first six months of the year,
even though temporary setbacks were recorded. Demand for PORR shares accelerated
greatly during the first half of 2005, with ordinary shares increasing in value by around
37.6% compared to the end of 2004 and closing the first half of 2005 at a rate of €128.
The rate for preference shares developed even more strongly, expanding by 71.1% to €130.
In line with the resolution of the Executive Board passed on 31 st March 2005, the sale of
own shares held by the company since 1991 (0.98% of total shares) took place in April
2005 through the Vienna Stock Exchange at a weighted average price of €112.36. For
more detailed information on the transactions performed, please visit www.porr.at.
DEVELOPMENT OF PORR SHARES FROM 1.1.2004 TO 30.6.2005 INDEXED ON 1.1.2004
200%
PORR ordinary shares
PORR preference shares
Vienna Stock Exchange Index
ATX – Austrian Traded Index
150%
100%
50%
0%
1.2004 4.2004 7.2005 10.2005 1.2005 4.2005
4

SELECTED PORR GROUP
CONSTRUCTION PROJECTS IN SECOND QUARTER 2005
SECTOR PLACE COUNTRY
PORR PROJEKT UND HOCHBAU AG (PPH)
Airport VIP-GAC Industrial construction Schwechat Austria
Siemensstrasse office building Office and commercial buildings Vienna Austria
Monte Laa Residential buildings Vienna Austria
Krems radiotherapy Other building construction Krems Austria
Opel Gliwice production plant Industrial construction Gliwice Poland
GKN Driveline production plant Industrial construction Olesnica Poland
Pekao Wilanowska residential complex Residential buildings Warsaw Poland
Winkelmann production hall Industrial construction Legnica Poland
Chodov Business Technology Park Office and commercial buildings Prague Czech Republic
Holiday Inn Opletalova Other building construction Prague Czech Republic
Europe Tower Office and commercial buildings Budapest Hungary
Kapas Center Office and commercial buildings Budapest Hungary
PORR TECHNOBAU UND UMWELT AG (PTU)
Renovation of Ofner Hiefler tunnel *) Other civil engineering Golling Austria
Hotel Triest Fontana Other building construction Bad Radkersburg Austria
Wienfluss main sewer and relief channel *) Other civil engineering Vienna Austria
PVA office building Office and commercial buildings Graz Austria
Station renovation and tunnel/airport Railway construction Schwechat Austria
A 7 “Mühlkreis” motorway, Bindermichl *) Other civil engineering Linz Austria
U 2/5 Stadion *) Other civil engineering Vienna Austria
U 2/1 Schottenring *) Other civil engineering Vienna Austria
Brixlegg tunnel *) Tunnel construction Brixlegg Austria
Wienerwald tunnel *) Tunnel construction Chorherrn Austria
Aubing tunnel *) Tunnel construction Munich Germany
Reinforced track, Lehrter Station *) Railway construction Berlin Germany
Autopalya M6 *) Road construction Erd Hungary
Matrans tunnel *) Tunnel construction Raron Switzerland
Track construction, Bradina – Konjic Railway construction Bradina Bosnia-Herzegovina
TEERAG-ASDAG AG (T-A)
Twimberg power station Other civil engineering Twimberg Austria
380 KV transformer substation Nord *) Other civil engineering Vienna Austria
General overhaul, A 1 Wolfsgraben Road construction Wolfsgraben Austria
Wörgl – Bruckhäusl *) Road construction Wörgl Austria
Brixen underpass Bridge construction Brixen im Thale Austria
Bridge for S-Bahn, Taxham Bridge construction Salzburg Austria
WIENER BETRIEBS- UND BAUGESELLSCHAFT M.B.H. (WIBEBA)
Brunn/Gebirge residential complex Residential buildings Brunn/Gebirge Austria
Conversion of Rossau barracks section 2 *) Other building construction Vienna Austria
Höchstädtplatz *) Office and commercial buildings Vienna Austria
*) Realised as joint venture
5

Allgemeine Baugesellschaft –
A. Porr Aktiengesellschaft
Absberggasse 47
A-1103 Wien
Tel. +43 (0)50 626-0
Fax +43 (0)50 626-1111
zentrale@porr.at
www.porr.at