Slump in the construction industry

Wienerberger suffered a significant drop in profits in 2024

The company has also recorded a one-off decline in profit due to negative effects. Turnover and dividend point upwards.

(Bild: APA/HERBERT NEUBAUER)

The listed building materials group Wienerberger clearly felt the effects of the slump in the construction industry in 2024. Profit after tax slumped by 76 percent to 79.8 million euros compared to the previous year. 

The company also recorded a one-off decline in profits due to negative effects, the Group said on Wednesday, referring to a sale in Russia and restructuring measures. Turnover and dividend point upwards.

Earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 10 percent to 706.6 million euros. Sales revenue increased by 7% to EUR 4.5 billion in the past financial year compared to 2023. Free cash flow increased by 62% to EUR 420 million. The dividend is to be increased by 5.6% to EUR 0.95 per share.

Crisis in residential construction
Despite a challenging market environment, particularly in the new construction sector, robust margins were achieved through cost management and operational efficiency. The construction industry faced "considerable challenges in the residential construction sector" in the past financial year, including a sharp decline in single-family and multi-family house construction of more than 25 percent in some cases. Rising interest rates, increasing construction costs and political uncertainties have made market development even more difficult, the company reported.

Stabilization expected
2024 was the "third best year in the company's history". Assuming that the relevant end markets remain stable this year and interest rates are lowered further over the course of the year, EBITDA is expected to increase to around EUR 800 million in the current financial year 2025.