Spain biggest property house builder
Effects of the property marketing stagnating finally seem to be working through to the market.
A large property developer announced poorer earnings due to the the slowdown of demand for new homes in Spain.
Actividades de Construccion & Servicios SA, Spain’s biggest builder by revenue, reported a 55 percent drop in fourth-quarter profit, weighed down by weaker office and shopping mall projects and a year-earlier disposal.
Net income at Madrid-based ACS declined to 286.1 million euros ($424 million) from 642.6 million euros a year earlier, when the company booked gains from a real-estate holding. Revenue advanced 50 percent to 5.3 billion euros, driven by stakes in power producers.
ACS exited Spanish property developer Urbis in 2006 and the builder said today homebuilding orders slowed at the end of last year, adding to a withering non-residential market. The company has invested more than $5 billion on stakes in Union Fenosa SA and Iberdrola SA, Spain’s third and second-biggest power generators, to skirt a slowdown in construction work and generate steadier growth.
“Construction was a little soft,” said Emilio Rotondo, an analyst at Fortis Bank in Madrid with a “buy” rating on the stock.
ACS was little changed at 33.70 euros as of 12:56 p.m. in Madrid trading. The stock has lost 17 percent in six months, less than the 34 percent plunge at competitor Grupo Ferrovial SA.
