MANNHEIM, Germany (Reuters) - Bilfinger (DE:GBFG) said human error was partly to blame for repeated profit warnings at the German engineering services firm over the past year but denied on Thursday there were systematic failures of corporate governance.
As shareholders demanded explanations for the five warnings that have almost halved the value of Bilfinger shares since last June, outgoing Chief Executive Herbert Bodner blamed over-optimism among managers used to better days.
"It's due to inaccurate assessments by individuals across many levels of hierarchy," Bodner told the company's annual shareholder meeting. "What was the cause? Not our systems."
Interim CEO Bodner said Bilfinger was now working on stricter financial controlling and hoped soon to be able to improve its market forecasting.
Bilfinger, which is highly exposed to the energy sector, sent out its latest warning two weeks ago, saying its U.S. oil and gas business was faring worse than expected and demand in its power plant business remained weak.
It has put off giving a detailed forecast for the current year until new CEO Per Utnegaard arrives in June, almost a year after Roland Koch quit as CEO after the second profit warning.
Still, shareholders demanded to know how such repeated failures of judgement could have occurred.
"How could it happen that the real profitability of projects was obviously vastly overestimated for months, maybe even for years?" asked Marcus Poppe, a fund manager at Deutsche Asset & Wealth Management, Bilfinger's seventh-biggest shareholder.
"The business model of a company like Bilfinger is not the sale of a product or many products but rather the execution of projects. Bilfinger's core competence should exactly be to be able to estimate the opportunities and risks of such projects."
Bilfinger said it was most recently surprised by German utilities, which are among its most important customers, cutting maintenance budgets after putting on hold new investments.
Shares in Bilfinger fell to new 2015 lows on Thursday after the company published full quarterly results that confirmed the latest warning, and closed down 4.7 percent at 42.52 euros (£27.9).
Utnegaard, a 55-year-old Norwegian who is currently CEO of airline ground-handling group Swissport, attended Thursday's shareholder meeting but did not ask or answer questions.
He told Reuters during a break in proceedings he was looking forward to the new challenge.
"It's a difficult time for the company," he said. "There's a lot to do."