Veidekke ASA: Veidekke posts a quarterly profit of NOK 370 million

Veidekke recorded a profit before tax for Q3 2014 of NOK 370 million, while revenue amounted to NOK 6.0 billion.
"Veidekke has had continued growth and progress in the third quarter. These good figures are the result of a great deal of hard work, efficient operations and higher project margins," says Arne Giske, President and CEO of Veidekke.

Veidekkes revenue in Q3 was NOK 5,977 million (5,624), with a profit before tax of NOK 370 million (358). This corresponds to a profit margin of 6.2 per cent (6.4 per cent). The combined order backlog now totals NOK 16.9 billion (17.3). The figures are from the segment accounts. Earnings per share (IFRS) came to NOK 2.2 (2.0).

Construction operations
Construction operations increased its turnover by 5 per cent in the third quarter, compared with the same quarter last year. This growth is attributable to a high level of activity, further boosted by the acquisition of Arcona in Sweden. The profit was up by 16 per cent, with the greatest increase from construction operations in Norway. "I am very pleased with the improvement in profits in Construction Norway and the performance of our Danish company Hoffmann, which continues to deliver strong margins. At the same time we are seeing a decrease in the order backlog, especially within civil engineering operations. This will result in slightly lower activity for civil engineering operations this winter," says Giske.

Revenue for construction operations was NOK 4,402 million (4,190) and profit before tax was NOK 148 million (128) in Q3.

Property development
Property development operations reported a NOK 20 million decline in profit from last year. The decrease in profit is primarily attributable to lower production in Norway as a result of weak housing sales in the second half of 2013 and early 2014. "There was a dip in the residential market a year ago, which has led to fewer housing starts so far this year. However, residential sales have picked up again in the last two quarters, especially in Sweden. This will mean more project starts and greater activity in the coming quarters," Giske explains.

At the end of the quarter Veidekke had 1,196 homes under construction, compared with 1,375 the previous year. 271 homes were sold (180), and the sales rate for projects under construction was 81 per cent (81 per cent).

Revenue from property development operations was NOK 338 million (455), and profit before tax was NOK 37 million (57).

Industrial operations
Veidekke Industri AS returned a record-high profit of NOK 193 million, up NOK 15 million from last year. The quarter saw very high activity levels, with a 21 per cent increase in revenue. "Most of this improvement can be ascribed to asphalt operations, linked to both construction of new roads and road maintenance, but the entire business area has had a high level of activity and delivered good professional craftsmanship in the quarter," concludes President and CEO Arne Giske.

Revenue for industrial operations was NOK 1,500 million (1,238) and profit before tax was NOK 193 million (178) in Q3.

Occupational health and safety
Occupational health, safety and the working environment are a top priority at Veidekke. A total of 75 injuries were reported in the quarter, down slightly from the previous quarter (101) and Q3 2013 (88). The figures include injuries to our own employees and subcontractors' employees alike, regardless of whether they result in absence or not. The most important measures for accident and injury prevention that have been implemented are basic occupational health and safety training for everyone involved in projects, more stringent requirements regarding use of safety equipment and a sharper focus on safety at every stage of projects from planning to production. The sickness absence rate was 3.9 per cent in Q3 2014. Sickness absence has stabilised at a lower level than previously in Norway and Denmark, while the situation has remained unchanged in Sweden.

Please refer to the Board of Director's report for the third 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, arne.giske@veidekke.no
CFO Terje Larsen, tel. +47 90 68 78 51, terje.larsen@veidekke.no
Communications Director Grete Nykkelmo, tel. +47 913 11 000, grete.nykkelmo@veidekke.no

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 characterised 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.

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