UPDATE 3-Hochtief ups 2010 orders goal as Australia buoys Q2

* Hochtief sees 2010 new orders and backlog up vs 2009

* Leighton contribs 73 pct of Q2 new orders, most of profit

* Q2 new orders 9.5 bln eur ($12.1 bln) vs poll avg 4.85 bln

* Q2 pretax profit 181 mln eur vs poll avg 180 mln

* Hochtief shares rise 5.65 pct, outperforming sector

(Adds new contract in Australia)

By Maria Sheahan

FRANKFURT, Aug 16 (BestGrowthStock) – Hochtief (HOTG.DE: ), Germany’s
biggest construction company, raised its 2010 outlook for new
orders after receiving several large contracts in Australia and
Asia in the second quarter.

“Alongside strong growth in contract mining in the
Asia-Pacific region, the company is benefiting from sustained
strong demand for construction services on infrastructure
projects in Australia,” Hochtief said on Monday.

While Australian unit Leighton (LEI.AX: ) bucked a recent
trend towards weaker domestic construction activity by pulling
in more contracts, Hochtief’s European orders shrank by more
than two-thirds in the second quarter, with the outlook
remaining weak despite strong economic growth. [ID:nLDE67C0YX]

Hochtief now expects 2010 new orders will exceed the 2009
level of 22.5 billion euros ($28.7 billion), rather than
slightly declining. It still sees pretax profit dropping
slightly after coming in just above estimates in the quarter.

Infrastructure companies have been bolstered by lavish
stimulus spending during the global economic crisis but were
expected to feel the brunt of public works cuts as governments
try to keep public finances under control. [ID:nLDE67B0DR]

Australia’s construction activity, for example, contracted
in June and July as public building was hit by the withdrawal of
stimulus spending after expanding for three straight months from
March through May. [ID:nSGE6740NM]

Hochtief seemed immune to the recent weakness. It announced
on Monday it won a 577 million euro contract to build a section
of the Hunter Expressway in New South Wales, Australia, which is
due to be opened for traffic at the end of 2013.

The group’s quarterly new orders were almost double the
volume that had been expected in a Reuters poll, with close to
three-quarters of orders coming from the Asia Pacific region,
raising hopes for robust sales in the years ahead.

Quarterly new orders at the Australian unit included a major
contract to work on a section of Melbourne’s ring road, a
project to upgrade the electrical distribution network of
western Australia’s Perth and a contract to provide coal mining
services in Indonesia.

Leighton also accounted for about 84 percent of Hochtief’s
quarterly pretax profit, helping offset weaker growth in Europe
and North America.


Shares in Hochtief jumped 5.65 percent to 52.43 euros by
1027 GMT, while the STOXX Europe 600 Construction & Materials
index (.SXOP: ) was up 0.3 percent.

Leighton’s shares rallied on Monday after the company
reported a 39 percent rise in full-year profit, helped by mining
services and infrastructure projects. [ID:nLEIGHTON]

Hochtief’s biggest German rival Bilfinger Berger (GBFG.DE: ),
which postponed plans to take its Australian unit public, raised
its outlook last week as it continued to cut its exposure to the
construction sector. [ID:nLDE66Q1SJ]

Europe’s construction sector is expected to contract for a
third consecutive year in 2010, and Germany, whose economy
bolstered the region’s growth in the second quarter, will be no
exception. [ID:nLDE6662B0]

“Construction demand in Germany is not expected to show a
sustained recovery in the medium term,” Hochtief said, adding it
would focus on cutting costs to remain profitable there.

France’s Vinci (SGEF.PA: ), the world’s largest construction
group, saw an acquisition offset a drop in European construction
projects. [ID:nLDE67A18O]

Investors are looking to other European players reporting
earnings this week to give an indication whether the
infrastructure industry is heading for a cliff as stimulus
programmes run out.

Austria’s Wienerberger (WBSV.VI: ), the world’s biggest brick
maker, cement makers Cimpor (CPR.LS: ) and Holcim (HOLN.VX: ) as
well as Dutch Boskalis (BOSN.AS: ) will publish results this week.
(Reporting by Maria Sheahan; Editing by Jon Loades-Carter,
Sharon Lindores)
($1=.7836 Euro)

UPDATE 3-Hochtief ups 2010 orders goal as Australia buoys Q2