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Reduced revenues in Block Watne, growth in Swedish operations in Q1 2014

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BWG Homes Group operating revenues for Q1 2014 amounted to NOK 986 million, an increase of 5.0 per cent when compared to Q1 2013. Operational EBITDA for the quarter was NOK 105 million, down by 15.3 per cent. Operational EBITDA margin for the quarter was 10.7 per cent (13.2 per cent), and operational EBIT margin was 10.2 per cent (12.7 per cent). 

The order backlog at the end of the quarter was NOK 1 832 million, up NOK 156 million from the previous quarter. This is mainly due to an increased order backlog for BWG Homes AB and the consolidated order backlog for Kärnhem.

Cash flow from operations for the quarter was negative at NOK 190 million against negative NOK 213 million in Q1 2013. The negative cash flow from operations meant that net interest-bearing debt increased by NOK 164 million from the previous quarter.

“Operating results in Q1 are affected by weaker sales and reduced production volumes in Block Watne combined with increased production costs. An agreement has been signed with Veidekke ASA on the sale of 50% of Ulsetstemma, a large development project in Bergen. This generated a gain of NOK 30 million (EBITDA) for Q1. Kärnhem shows improved results, and BWG Homes AB (Myresjöhus and SmålandsVillan) has good sales and increased revenues in the quarter. The improvement in the Swedish housing market contributed to an increase in the Group’s order intake, which rose by NOK 59 million (5.7%) to NOK 1 100 million”, comments Ole Feet, CEO in BWG Homes ASA.

“The Norwegian housing market shows a certain improvement in March and April. Sales during 2014 are expected to be at an acceptable level, but lower than the levels achieved in previous years. Consequently, Block Watne is arranging for reduced activity in the remainder of 2014, and hence a lower level of tied-up capital. There is a strong focus on reducing tied-up capital and achieving a positive cash flow through a considerable reduction of the number of completed units. In addition, there are processes ongoing on establishing joint ventures for several major development projects that can be capital intensive. Sales of selected land sites that are not considered important for future production are considered case by case”.

“The housing market in Sweden showed positive growth in 2013, and this trend is expected to continue in 2014 in the face of a large unmet need for new housing. According to Prognosesenteret AS, new housing starts will total just close to 31 000 units in 2014, which is a significant increase from previous years. The market outlook for our Swedish operations BWG Homes AB and Kärnhem is significantly improved. The focus on projects under the company’s control, housing cooperative projects and a large product portfolio of affordable, space-efficient homes is expected to have a positive effect on volumes and earnings going forward”, Ole Feet comments further

Change in dividend policy

The Board has established a new dividend policy for the company. The Board will aim to achieve a dividend payment for the fiscal year 2014 of NOK 0.50 per share.

Key operational figures Q1 2014*:

  • Operating revenues: NOK 986 million (NOK 939 million)
  • Operational EBITDA: NOK 105 million (NOK 124 million)
  • Operational EBITDA margin: 10.7 % (13.2 %)
  • Operational EBIT: NOK 101 million (NOK 120 million)
  • Operational EBIT margin: 10.2 % (12.7 %)
  • Cash flows from operations after interest and tax: NOK -190 million (NOK -213 million)
  • Order intake: NOK 1 100 million (NOK 1 041 million)
  • Order backlog: NOK 1 832 million (NOK 1 568 million)
  • Units in production: 1 271 (1 226)
  • Units sold in the period: 473 (433)
  • Units delivered: 294 (313)
  • Unsold completed units: 115 (102)

* The operational figures are based on the internal management reports which differ somewhat from the consolidated accounts; see note 1 in the interim report. The figures include Kärnhem AB with effect from May 2013.

For the consolidated income statement (IFRS), reference is made to page 10 in the interim report. For more details, see the attached interim report.

Further information from:

Ole Feet, CEO, tel: +47 900 91 230

Arnt Eriksen, CFO, tel: +47 922 14 625

BWG Homes develops, sells and constructs residential homes in the Nordic region. The brands owned by the Group are Block Watne and Hetlandhus in Norway, Kärnhem, Myresjöhus and SmålandsVillan in Sweden. Ranked as a leading residential house builder in its markets, the Group annually completes approx. 2 000 new homes through own residential projects and for individual customers. BWG Homes has 1 040 employees. In 2013 the operational turnover was NOK 3.9 billion. More information about the Group at www.bwghomes.no/en

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