28.10.2010

Harsco Infrastructure’s losses mount

Harsco Infrastructure the access rental and formwork business has reported third quarter revenues down nine percent on the same quarter last year at $254 million, although over half of the decline was due to currency factors.

The division’s operating loss was reduced from $22.5 million last year to $13.4 million this year. For the nine months to the end of September revenues were $766.8 million, down 12.5 percent on last year, with an operating loss of $46.5 million, compared to a profit of $66.3 million in 2009.

The company’s statement says that the improving situation in the UK has been reversed by the country’s recently implemented economic austerity measures. It adds that continuing negative end-market conditions in mainland Europe, also due to austerity measures and the sovereign debt crisis have also affected its performance.

In the Gulf region of the Middle East the sovereign debt crisis of Dubai is the cause, all of above have resulted in projects being deferred and postponed at higher levels than expected, while pricing continues to be very challenging.
Harsco says that the Infrastructure business is expected to incur another significant operating loss in the fourth quarter.

The Company adds that it is responding to these challenges with additional countermeasures and new operating leadership. As a result it expects to incur a substantial restructuring charge in the fourth quarter.

Harsco chief executive Salvatore D. Fazzolari said: “While our overall third quarter results were better than we expected, we continue to experience very difficult end-market conditions within our Harsco Infrastructure business. In this regard, we are taking a number of steps to right-size this business, under new leadership, to address the on-going market challenges. We look forward to more fully discussing these steps at our Annual Analysts Conference to be held in New York City on December 10th. The result of these actions will culminate in an expected restructuring charge in the fourth quarter of 2010.”