German engineering and services company Bilfinger SE slashed its 2014 outlook on Monday, blaming fallout from Germany's transition to renewable energy for its woes.
Adjusted earnings before interest, tax and amortization (EBITA) are expected to come in between 380 million euros ($518.34 million) and 400 million euros this year, down from 419 million in 2013, it said in a statement.
Bilfinger's EBITA margin in its power business is expected to slide to 6 percent in 2014 from 8.9 percent last year, hurt by a reluctance to invest on the part of energy suppliers affected by the shift to green energy.
"The extent of the negative impact on investment behaviour in other central European countries was not foreseeable," the statement said.
"German wind energy provided at no charge, for example, is preventing the construction of new power plants in Poland," it said.
Adjusted net profit will be between 230 million euros and 245 million euros, compared with 255 million in 2013, it said.
Bilfinger said it would adjust capacities in its power and industrial business segments, starting further near-term cost- cutting programmes without delay.
This would lead to an additional restructuring expense in the low to middle double-digit million-euro range in the second half of the year, it said.
After the restructuring, Bilfinger will again target a margin above 8 percent in the power business segment from 2016, it added.
($1 = 0.7331 Euros)
(Reporting by Jonathan Gould; Editing by Larry King)