Veidekke ASA: Strong growth and improvement in results for Veidekke
May 8, 2014 - London
The good trend continues for Veidekke. In the first quarter of the year, turnover was NOK 5.2 billion, which is an increase of 30% compared to last year. Earnings before tax amounted to NOK 4 million, compared with a NOK 63 million deficit in the same period last year.
"Q1 involves a lot of expenses for Veidekke. We nevertheless see a significant improvement over last year. Most of the units have seen good progress in the first three months of the year, and earnings confirm that the measures have been effective and that 'craftsmanship' is good in the entire Group," says CEO and President Arne Giske of Veidekke.
Veidekke's turnover in Q1 was NOK 5,228 million (4,049), and earnings before tax were NOK 4 million (-63). This corresponds to a profit margin of 0.1 per cent (-1.6). The combined order backlog now totals NOK 18.1 billion (16.8). The figures are from the segment accounts. Earnings per share was NOK 0.20 (-0.40).
"The Scandinavian markets are picking up, and we are particularly pleased that the Swedish market is back. The improvement is primarily related to a higher level of activity and better project margins in construction operations, but also contributions from project sales and high activity in Swedish property operations," Giske continues.
Construction operations are showing growth and improved margins in Norway, Sweden and Denmark in the first quarter. Turnover has increased by around 20%, and earnings have almost doubled compared to last year. In Norway growth was most pronounced in the construction market, while in Sweden it was greatest in housing and commercial property. The order backlog has dropped somewhat in Norway due to the housing market, while it has increased significantly in Sweden and Denmark.
Turnover for construction operations were NOK 4,318 million (3,590) and earnings before tax were NOK 87 million (46).
Veidekke's property operations saw an increase in turnover and improvement in results in Sweden, while an anticipatory housing market has led to a decline in Norway. Parts of both turnover and earnings in Sweden may be attributed to project sales. At the end of the quarter Veidekke had 1,179 homes under construction, compared with 1,381 the previous year. 130 homes were sold, against 212 the year before, including jointly-owned projects. The sales rate for projects under construction was 75% (77%), with an increasing level of interest and sales towards the end of the quarter.
Turnover in property operations was NOK 750 million (406), and earnings before tax were NOK 77 million (45).
Veidekke saw good results from the public asphalt contracts, and also has a fair amount of asphalting in major infrastructure projects that are currently being carried out in Norway. The company has also been awarded several new five-year contracts for operation and maintenance.
Industrial operations had turnover of NOK 403 million (288) and a negative result before tax ofNOK 141 million (-140).
"The order backlog is record-high before the start of the season, and with an early start to the season the outlook is good for asphalt operations," Giske concludes.
Occupational health, safety and the working environment (HSE)
Veidekke lost one employee in a tragic accident in connection with work on a cavern garage facility in Sotra at the end of April, and the company will routinely investigate the accident in cooperation with the Police and Labour Inspection Authority.
Work on reducing the number of accidents and serious incidents continues and has top priority, and the LTI rate for the Group (number of injuries with absence per million hours worked) dropped to 6.3 in Q1 (6,9). Sickness absence for employees in Norway was 4.7% (4.8%), in Sweden 4.4 % (3.6%) and in Denmark 1.1% (1.7%). All figures are 12 months rotating as of Q1.
Please refer to the Board of Director's report for the first quarter 2014, which is attached to this press release.
For more information please contact:
President and CEO Arne Giske, tel. +47 21 05 50 00 / +47 90 58 95 26, email@example.com
CFO Terje Larsen, tel. +47 90 68 78 51, firstname.lastname@example.org
Communications Director Grete Nykkelmo, tel. +47 913 11 000, email@example.com
Veidekke is one of Scandinavia's largest contractors and property developers. The company undertakes all types of building and construction contracts, maintains roads and produces asphalt, crushed stone and gravel. The company is characterized by involvement and local knowledge. Turnover is NOK 21 billion (2013), and half of the 6,300 employees own shares in the company. Veidekke is listed on the Oslo Stock Exchange and has always posted a profit since it was founded in 1936.
Veidekke - local presence, Scandinavian strength.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Veidekke ASA via Globenewswire