DESTIA’S BUSINESS DEVELOPED POSITIVELY IN THE FIRST HALF OF THE YEAR

Destia Group Plc

STOCK EXCHANGE RELEASE

9.8.2016 at 9.00 (CET +1)

This is a summary of the Destia’s Half year financial report for January-June 2016. The complete report with tables is attached to this release and available at www.destia.fi/en

Destia’s Half year financial report January−June 2016

DESTIA’S BUSINESS DEVELOPED POSITIVELY IN THE FIRST HALF OF THE YEAR

• Revenue increased by 11.4 per cent, to MEUR 200.1 (179.6).

• Operating result improved with respect to the comparison period and was MEUR -1.2 (-3.7).

• The order book was MEUR 800.2 (821.4).

• Occupational safety remained at an excellent level: the accident frequency was 5.3 (6.8).

• Destia’s revenue for 2016 is expected to grow, and operating profit is expected to fall short of the previous year as other operating income is estimated to be lower than in the previous year.

Market guidance for 2016 clarified

• New market guidance: Destia’s revenue for 2016 is expected to grow, and operating profit is expected to fall short of the previous year as other operating income is estimated to be lower than in the previous year.

• Previous market guidance: Destia's revenue for 2016 is expected to grow, and operating profit is expected to fall short of the previous year.

President and CEO Hannu Leinonen comments on the reporting period:

“Destia’s second quarter proceeded moderately in spite of intense competition in the sector. There have been plenty of invitations to tender and overall demand continues at a moderate level. As a sign of this, both our revenue and operating result increased in comparison with the corresponding period the previous year. During the reporting period, our order book developed positively, both in our core businesses and in our focus areas of strategic growth. We strengthened our market position as an expert in the entire life cycle of track maintenance by winning the contract for track network maintenance area 6 during the reporting period. In terms of numbers, more than half of all track maintenance contracts are now managed by Destia. We also made a significant investment in equipment by purchasing a new universal tamping machine for our railway business.

As a result of a corporate acquisition concluded at the beginning of April, we strengthened our special expertise in foundation engineering, engineering construction and rock construction. Cooperation with our new experts has started well. We have been able to offer solutions more extensively than before.  

Our strong investments in the development of personnel expertise and occupational safety are evident in our operations. I am happy that the investments we have made in occupational safety are noticeable in practice. In our business, an accident frequency of 5.3 is excellent. This year we are also employing a record number of interns and summer workers, giving them a grandstand view of infrastructure construction, design and maintenance.”

Outlook for 2016

The eurozone economy is showing signs of recovery, although the effect of the results of the British Brexit vote on the development of the economy is not yet known. The Finnish economy is also expected to grow this year, supported by construction investments. Stimulus for the operating environment of the construction sector is being created by an action programme resulting from the Finnish Government’s discussion on spending limits in the spring, which contains funding for several key road projects. These will positively impact the development of the whole sector this year and over the following two years. In addition to the public sector, some large individual projects have started or are being planned, and they will positively affect future prospects for the sector. The market situation will continue to be challenging with competition remaining fierce.

The prospects for the infrastructure sector and Destia’s order book which extends over several years provide a good basis for the positive development of revenue. The measures that have been taken towards improving customer work and project management will help to keep business volumes and cash flow on a moderate level.

Market guidance for 2016

Destia clarifies the guidance published on 11 February 2016 for the year as follows:

Destia’s revenue for 2016 is expected to grow, and operating profit is expected to fall short of the previous year as other operating income is estimated to be lower than in the previous year.

Vantaa, 8 August 2016

Destia Group Plc

Board of Directors

More information

President and CEO Hannu Leinonen, tel. +358 20 444 4000 and CFO Pirkko Salminen, tel. +358 50 302 2485

Financial reporting 2016

Destia has adopted certain conditions of the reporting policy contained in the requirements of the Market Abuse Regulation (MAR), which entered into force on 3 July 2016.

Destia will publish its interim report for January−September on 26 October 2016.

DISTRIBUTION:
Nasdaq Helsinki Oy
Key media
www.destia.fi/en

Destia: Destia is a Finnish infrastructure and construction service company. We build, maintain and design traffic routes, railways, industrial and traffic environments as well as complete living environments. In 2015 the company’s revenue was over MEUR 460. With 1 500 dedicated experts we build the bigger picture, piece by piece. www.destia.fi/en