BWG Homes ASA: Q1 2012 - solid results in Norway, but still demanding in Sweden

BWG Homes ASA operating revenues for Q1 2012 amounted to NOK 842 million, a decline of 9.2 per cent when compared to Q1 2011. Operational EBITDA for the quarter was NOK 93 million, a decrease of 6.6 per cent. Operational EBITDA margin was 11.0 per cent (10.7 per cent), and operational EBIT margin was 10.5 per cent (10.1 per cent).

The order backlog at the end of the quarter was NOK 1 660 million, an increase of 2.9 per cent from the previous quarter.

Cash flow from operations for Q1 was negative at NOK 88 against negative NOK 214 million in Q1 last year. The Group normally has a substantial tied-up capital in the 1st quarter as a result of in tied-up working capital in projects. Net interest-bearing debt decreased by NOK 306 million from year-end 2011.

"The trend from previous quarters continued, namely strong underlying growth in the Norwegian operations, but a challenging situation in the Swedish operations due to low sales during 2011 and long sales processes. Even with a demanding market in Sweden, we are pleased to state that the Group shows good profitability in Q1", comments Lars Nilsen, CEO in BWG Homes ASA.

In the Norwegian operations, improved production capacity, operational efficiency and good sales have resulted in a solid performance and continuing strong margins in Q1. In the Swedish operations, profitability remained low during Q1, but slightly better than in the previous quarter. The weak margins are mainly caused by weak sales through 2011 and hence a lower delivery rate. Myresjöhus was particularly affected by pressure on margins, while SmålandsVillan continued to deliver acceptable margins. The Swedish field organisation is reorganised with effect from January 2012 with the aim of increased activity in own residential projects in growth regions. Improvement programmes aimed at cost reduction and increasing efficiency and delivery quality will be continued in 2012.

"The underlying need for new homes is still high in Norway and Sweden. The housing market in Norway is expected to continue to be strong, although it is too early to say whether the increased capital requirement will dampen demand. The market conditions in Sweden will remain challenging in 2012. Although there is a certain volume of customers, the financing of home purchases is a particular challenge for buyers with little equity, Lars Nilsen comments further.

Strengthened financial position
At the beginning of 2012, the Group strengthened its financial position considerably with share issues totalling NOK 435 million and the completion of a three-year bond issue of NOK 300 million. The proceeds from the bond issue have been used to repay long-term debt with Nordea.

"The issues provide the Group with a capital structure that strengthens its ability to finance its growing activity in Norway and Sweden, particularly in view of the uncertainty about banks' lending capacity and willingness to lend in a situation of international financial turmoil. The bond issue opens up a new capital market for the Group which represents a good long-term alternative to its bank financing", comments Lars Nilsen.

Key operational figures Q1 2012*:

• Operating revenues: NOK 842 million (NOK 928 million)
• Operational EBITDA: NOK 93 million (NOK 99 million)
• Operational EBITDA margin: 11.0 % (10.7 %)
• Operational EBIT: NOK 89 million (NOK 94 million)
• Operational EBIT margin: 10.5 % (10.1 %)
• Cash flow from operations after interest and tax: NOK -88 million (NOK -214 million)
• Order intake: NOK 910 million (NOK 1 027 million)
• Order backlog: NOK 1 660 million (NOK 2 051 million)

* The operational figures are based on the internal management reports which differ somewhat from the consolidated accounts; see note 1 in the interim report.

For the consolidated income statement (IFRS), reference is made to page 9 in the interim report.

For more details, see the attached interim report.

Further information from:
Lars Nilsen, CEO, BWG Homes ASA, tel: +47 23 24 60 00,

Arnt Eriksen, CFO, BWG Homes ASA, tel: +47 23 24 60 37, +47 922 14 625.