Wienerberger says Austria no economic haven -paper

Austrian homebuilding is not immune to the euro zone's economic crisis, the chief executive of the world's biggest brickmaker Wienerberger AG was quoted saying in a newspaper, although he said the country was an "Eldorado" compared with some other markets.

Heimo Scheuch said the company was suffering badly in Europe, which accounts for 90 percent of group sales, but he was still confident of making a core profit in the United States this year, while Russia and India were performing very well.

"Eastern Europe is in general still under considerable pressure. Some markets have to shrink themselves healthy," he said in remarks published on Monday, citing Hungary as an example. "By comparison, Austria is an Eldorado."

But asked by Austria's WirtschaftsBlatt whether Austria was a safe haven, Scheuch said it was not.

"If someone doesn't know whether he'll have a job tomorrow, he's not going to build a family home. And even if homes are still built, two new family homes will not make up for the cancellation of a large public project," he said.

Nonetheless, Scheuch said Wienerberger was to some extent protected from the broader crisis in the construction industry because of its exposure to the residential market, and had bought plastic pipe maker Pipelife to diversify further.

He said the company had the potential to make annual earnings of 500 million euros ($616 million) before interest, tax, depreciation and amortisation (EBITDA), without more investments, adding Pipelife would take that figure closer to 600 million euros.

Scheuch also said prices for Wienerberger's products had risen in 2011 and were still increasing.

Asked whether Wienerberger might expand into China, Scheuch said such a move was not under discussion at the moment, and in any case the company first had to absorb its acquisition of Pipeline while keeping its debt-to-EBITDA ratio below 2.5. ($1 = 0.8121 euros) (Reporting by Georgina Prodhan; Editing by David Holmes)

Source Reuters