NRC GROUP – FOURTH QUARTER 2017 RESULT REPORT AND PRESENTATION
Strong project execution and order intake throughout 2017
Today, 13 February 2018, NRC Group has released its financial results for the fourth quarter of 2017.
The company will present the results at 11.00 AM (CET) at Arctic Securities offices, Haakon VIIs gt.5, Oslo. The presentation will be held by CEO Øivind Horpestad and CFO Dag Fladby.
Below you will find a summary and highlights from the report.
- Continued strong project execution
- Increase in tender activity in Norway
- Strong order backlog of NOK 2,408 million, an increase of 72%
- Proposed dividend of NOK 1.75 per share
Key figures Q4 2017
- Revenues of NOK 673.8 million in 2017 vs NOK 551.7 million in 2016
- EBITDA of NOK 69.7 million in 2017 vs NOK 47.4 million in 2016
- EBITDA margin of 10.4% in 2017 vs 8.6% in 2016
Key figures 2017
- EBITDA margin improved to 9.7% in 2017 from 7.7% in 2016
- Full-year revenue growth of 20%
Comments on fourth quarter 2017 results:
NRC Group continued its positive development and had a record quarter with revenue increase and solid EBITDA growth.
Fourth-quarter revenue was NOK 673.8 million, an increase of 22.1% compared with the same period of 2016. The early onset of winter impacted activity in Sweden as work on some projects were postponed to 2018. Activity levels in Norway reflected a low level of rail- and tramway projects awarded earlier in the year. EBITDA was NOK 69.7 million (NOK 47.4 million), equalling an EBITDA margin of 10.4% (8.6%) due to solid project execution.
Full-year 2017 revenue was NOK 2,372.8 million, an increase of 20.1% from 2016. EBITDA was NOK 229.2 million (NOK 152.4 million), and the EBITDA margin was 9.7% (7.7%). Full-year revenue-growth and increased profitability reflected continued market expansion, strong project execution and successful delivery on the group’s consolidation strategy.
Order intake for the fourth quarter was NOK 616 million (NOK 570 million) and the backlog amounted to NOK 2,408 million at the end of December, an increase of 72% from last year.
In the fourth quarter, NRC Group signed a SEK 41 million groundwork contract for Stora Enso Timber AB and a SEK 44 million contract for renewal of the signalling system in Varberg municipality for the Swedish Transport Administration. Furthermore, the Swedish Transport Administration decided to exercise a contract option on a frame agreement of SEK 30 million. The volume of new orders reflected the normal year-end cycle with high tendering activity. Additional orders for ongoing projects led to a high level of unannounced contracts in the quarter.
In October, NRC Group acquired Fibertech AS. The acquisition of Fibertech will strengthen the operations and services of NRC Group’s Norwegian branch.
The acquisition activity was high in 2017. NRC Group will continue its strategy of organic and acquisitive growth in 2018.
In Norway, NRC Group experienced high tendering activity towards the end of 2017 and into 2018 with increased focus on larger turnkey projects covering several special competencies. This is in line with the strategic positioning over the past few years. While ongoing tenders are expected to be awarded in 2018, execution of some of the larger projects on tender is estimated to start end of 2018 or in 2019 and later.
In Sweden, the underlying market grows at a stable pace. Approval of the new NTP is expected in April and will likely lead to increased market activity.
NRC Group operates in a market driven by strong macro trends such as urbanisation, population growth and the need for environmentally sustainable transport solutions. The approved National Transport Plan (NTP) in Norway and the proposed NTP for Sweden give better visibility and confirm political commitment to increase spending on developing national transport systems and the shift towards larger turnkey projects. These indicate further growth to already historically high budgets and investments in years to come. This is supported by sanctioned upgrade and expansion projects, increased tendering activity and a vast and growing maintenance backlog related to installed transport infrastructure in Norway and Sweden.
It is NRC Group’s ambition over time to distribute a dividend of minimum 30% of the profit for the year, subject to a satisfactory underlying financial performance. Based on the 2017 results, strong financial position and confidence in the future, the Board of Directors will propose a dividend of NOK 1.75 per share for 2017 (NOK 0.80).
The fourth quarter 2017 result report and result presentation can be found attached and will be made available on the company's homepage: www.nrcgroup.com.
For further information, please contact Dag Fladby, Chief Financial Officer, NRC Group ASA on tel: +47 90 89 19 35.
About NRC Group:
NRC Group is a leading contractor within railway infrastructure in Norway and Sweden. The company is a supplier of all track-related infrastructure services, including groundworks, specialized track work, safety, electro, telecom- and signalling systems. The company works within rail, metro, tram segments and close related infrastructure. NRC Group has experienced significant growth since its inception in 2011 and has a vision of becoming the leading Nordic entrepreneur within railway infrastructure.
For more information: www.nrcgroup.com
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.