Strabag Reaffirms Sochi Plans

Strabag, Central Europe's biggest builder, may beat its 2008 profit target and is optimistic for the firm's construction plans in Sochi, the site of the 2014 Winter Olympics.

"We'll reach our goals, perhaps exceed them," its chief executive Hans-Peter Haselsteiner said last week at an investors conference in Vienna. "We're very optimistic for 2009."

The construction business in the Czech Republic, Poland and Slovakia will probably weather the slowdowns affecting Western economies, Haselsteiner said.

The Vienna-based company also anticipates consolidation in Europe's construction industry.

In Russia, where Strabag is banking on construction contracts for the 2014 Winter Olympics in host city Sochi, the company expects Moscow's fiscal balance to keep business going, Haselsteiner said. Russia's budget surplus amounted to 8.1 percent of gross domestic product in the first nine months this year, and the budget will break even in 2009 if the price of Urals crude averages $70 a barrel, the Finance Ministry said last week.

"We have more offers than capacity" in Russia, Haselsteiner said. "Sochi will go forward."

Haselsteiner moved Oct. 9 to keep Oleg Deripaska as a shareholder, agreeing with banks to refinance 500 million euros ($671 million) of loans used by the Russian billionaire to gain a 25 percent stake in the company.

Bloomberg, MT