FRANKFURT--Shares in Bilfinger SE (GBF.XE) nosedived on Tuesday
after the German construction and services company slashed its 2014
profit outlook, citing high power costs caused by the country's
transition to renewable energy.
"The power business segment in particular is suffering from the
effects of the energy transformation in Germany, which has led to a
considerable reluctance to invest on the part of energy suppliers,"
Bilfinger said in a statement.
The company said it now expects an output volume of about 7.9
billion euros ($10.8 billion), down from the previous forecast of
at least EUR8 billion. While earnings adjusted before interest and
amortization would drop to between EUR380 million-EUR400 million
from EUR419 million last year, it expects net profit to fall to
between EUR230 million to EUR245 million from last year's EUR255
million.
Shares fell nearly 17% at the open. DZ Bank and Equinet said
they would review their estimates on Bilfinger in light of the
warning. "The profit cut was very surprising, even despite a slow
start in the first quarter," said Jasko Terzic, an analyst at DZ
Bank.
The company said the energy transition was affecting its
business even outside Germany.
"German wind energy provided at no charge, for example, is
preventing the construction of new power plants in Poland,"
Bilfinger said, referring to surplus energy generated in Germany
that shipped over the border.
Europe's largest economy is pursuing one of the world's most
ambitious climate-protection strategies, and is aiming to nearly
eliminate greenhouse gas emissions by the middle of the century.
The government plans to drop all nuclear and most fossil-fueled
power generation in favor of alternatives such as wind and solar
power, which have been heavily subsidized by the state.
Write to Natalia Drozdiak at natalia.drozdiak@dowjones.com
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