Wienerberger reduces profit forecast, shares tumble

Brickmaker Wienerberger (WBSV.VI) reduced its full-year core profit target by 2.5 percent after orders for international projects and demand in France fell short of expectations, sending its shares down more than 8 percent.

The Austrian company now expects earnings before interest, tax, depreciation and amortisation (EBITDA), adjusted for contributions from the sale of non-core assets and other effects, to reach 405 million euros (357.85 million pounds) in 2017, it said on Wednesday.

Previously it forecast 415 million euros.

The world’s largest brickmaker said that higher raw material costs, sinking demand for one- and two-family homes in Germany and repercussions of wet weather in the United States were also factors for the forecast adjustment.

Wienerberger shares fell as much as 8.9 percent in early trade to 19.80 euros.

The stock has gained more than 25 percent since the beginning of the year, outperforming the European construction index .SXOP, which is up nearly 10 percent.

Wienerberger reported a flat EBITDA of 125 million euros for the third quarter, whereas analysts had expected 139 million euros on average, according to Thomson Reuters data.

Revenue of 832 million euros also fell short of expectations for 871 million euros.

While the recovery expected for the third quarter did not materialise in certain fields of business, there was a reason to be optimistic in the longer term, Chief Executive Heimo Scheuch said in a statement. “In the medium and long term, we anticipate sustainable growth in new housing starts and in infrastructure spending,” Scheuch said. “This trend is already clearly visible in Eastern Europe.”

Wienerberger has been on a shopping spree in recent months, buying brickmakers in Austria, Germany, the U.S. and Romania and Belgian prewired conduits maker Preflex in its expand globally, spending a total of 85 million euros.

Source Reuters reporting by Kirsti Knolle, editing by Louise Heavens