Veidekke ASA: Continued growth and profitability improvement
2012-11-08 07:05:18 -
The Veidekke Group showed a revenue growth of 14% to 5.2 BNOK in the third
quarter of 2012 as the Group's total order backlog increased by 21% to 16.1
BNOK. Profit before tax rose 22% to 274 MNOK, representing an operating margin
"The third quarter results show that Veidekke is continuing a positive trend of
strong growth in both turnover and new orders. Housing sales in Norway are good
and margins in our Construction operations are gradually improving. Construction
operations in Sweden also show some improvement, although home buyers there
remain hesitant," says Veidekke's President and CEO, Terje R. Venold.
Veidekke's turnover in the third quarter totalled 5.2 BNOK (4.6 BNOK in 2011).
Growth was largely organic, supplemented by smaller acquisitions. Profit before
tax was 273.9 MNOK (225.1). The order backlog at the end of the third quarter
was 16.1 BNOK (13.4). The figures are taken from the segment accounts for the
third quarter, with the corresponding figures for the third quarter of last year
"The economic turmoil in Europe as well as European contractors' focus on the
Norwegian market have intensified competition and put added pressure on margins.
We are well prepared to face the competition and are strengthening our skills
base with more employees and a growing pool of trainees and apprentices. An
increased focus on HSE and the development of our models for participative
partnerships put us in a position to capitalise on market opportunities and
generate profitable growth going forward," says Terje R. Venold.
With a turnover of 3.9 BNOK in the third quarter (3.5) for Construction
operations, and a profit margin improvement to 2.7% (2.1%), Construction earned
a profit before tax of 105.8 MNOK (72.9). The Norwegian operations accounted for
71% of the revenue, while Sweden accounted for 21% and Denmark for the remaining
Revenue in the Norwegian construction operations increased by 20% from the third
quarter last year, and better margins on newer projects resulted in a profit
margin increase to 2.5% (2.3%). Turnover for construction operations in Sweden
increased by 4%. The profit margin improved significantly to 2.6% (0.6%).
Revenue in the smaller Danish business fell 27%, but a strong focus on
profitability resulted in a profit margin increase to 4.6% (3.6%) and a
virtually unchanged profit before tax.
The order backlog for construction operations increased to 14.6 BNOK at the end
of the quarter (13.4), reflecting growth in Norway, flat growth in Sweden and a
fall in orders from a difficult construction market in Denmark.
Veidekke Property operations had a turnover of 444.3 MNOK in the third quarter
(314.4) with a profit before tax of 59.8 MNOK (31). A total of 191 units were
sold in the quarter, including Veidekke's share of jointly owned projects.
Both sales growth and profit improvement relate primarily to the Norwegian
operations, which accounted for 73% of sales in the third quarter. The housing
market in Norway showed continued strong demand and brisk sales, especially in
and around the major cities. Property activities in Sweden accounted for 26% of
total property sales, and showed a moderate growth from the third quarter last
year. The Swedish market is significantly more affected by the global economic
turmoil, and the reluctance of Swedish banks to finance both projects and
private market mortgages.
The number of housing units under production was 1 314 (our share) at the end of
the quarter (1 205).
Industry operations had a turnover of 1 093.0 MNOK in the third quarter (918.6),
with an increase in sales for both asphalt operations and road maintenance. Pre-
tax profit fell to 115.1 MNOK (136.1), mainly due to increased margin pressure
in the asphalt business.
The number of injuries declined in the third quarter, and the injury rate for
the last 12 months fell to 8.3 from 8.9 in the previous quarter. Sick leave for
employees in Norway increased slightly to 5.2%, but fell to 3.6% in Sweden and
2.3% in Denmark.
We also refer to the company's earnings report for the third quarter of 2012,
which is attached to this press release.
Report 3rd quarter 2012 (html)
For more information, please contact:
Chief Executive Officer Terje R. Venold, tel. (+47) 21 05 77 01 / (+47)
90 58 23 23 m, firstname.lastname@example.org
Executive Vice President, Communication, Kai Krüger Henriksen, tel. (+47)
21 05 77 04 / (+47) 90 51 93 60 m, email@example.com
Communications Manager Helge Dieset of Veidekke, tel. + 47 21 05 77 91 /+47
90 55 33 22, firstname.lastname@example.org
Veidekke is one of Scandinavia's leading contractors and property developers
with a turnover of NOK 18 billion (2011) and 6,500 employees. Activities include
building and construction projects, residential developments, asphalt plants,
gravel and aggregates, and road maintenance. Our values are professional,
honest, enthusiastic and pioneering. Our goals for health, safety and the
environment, HSE, have equal status with our financial goals. Veidekke is
characterised by a strong corporate culture with employee involvement and co-
ownership as important cornerstones. More than half of the employees are co-
owners, holding around 20% of the Group's shares between them. The company is
listed on the Oslo Stock Exchange and has never declared a loss since it was
founded in 1936.
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
Report Q3 2012:
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Veidekke ASA via Thomson Reuters ONE