NRC Group ASA – First quarter 2019 result report and presentation
Today, 14 May 2019, NRC Group has released its financial results for the first quarter of 2019.
The company will present the results at 12.00 AM (CET) at Carnegie offices, Fjordalleen 16, Aker Brygge, Oslo. The presentation will be held by Øivind Horpestad and Dag Fladby. The new CEO of NRC Group, Henning Olsen, will also attend.
If you want to attend the presentation, please register by email to: firstname.lastname@example.org.
Below you will find a summary and highlights from the report.
- Closed acquisition of VR Track Oy - integration progressing as planned
- Significant increase in tendering in Sweden, high activity in Norway and Finland
- Henning Olsen appointed new CEO
- Appointed to largest ever contract to date of EUR 220 million by City of Espoo and City of Helsinki
Key figures Q1 2019
- Revenues of NOK 1,225 million vs NOK 528 million in Q1 2018
- Total EBITDA excluding M&A costs of NOK 7 million
- Satisfying order intake in the quarter, amounting to NOK 1,480 million
- Order book of NOK 6,790 million including JVs
Comments on first quarter 2019 results:
High tendering activity in all markets
In the first quarter, which is low season, the revenue was NOK 1,225 million, compared to NOK 528 million reported for the same period in 2018, an increase of 132%. The underlying organic growth was 10%. The acquisition of VR Track was closed on 7 January and consequently the first quarter 2019 includes figures from that operation.
EBITDA excluding M&A costs was NOK 7 million.
The Norwegian operation continued to report good growth and profitability. Revenue was NOK 470 million compared to NOK 212 million in first quarter of 2018. The organic growth was 51%. EBITDA excluding M&A costs was NOK 14 million.
Revenue from the Swedish operations amounted to NOK 298 million for the quarter compared to NOK 316 million in the first quarter of 2018. The revenue and the profitability in Sweden were, as expected, impacted by the decline in the market in 2018 and a low order book at the start of the year. Tender and award activity has strongly increased during the quarter. This is reflected in NRC Group’s order intake to date in 2019. However, there will still be a lag before new orders come to execution and impact the revenue and margin. EBITDA* in the first quarter was NOK -7 million. The organic growth was -25%.
Finland had revenue of NOK 361 million and an EBITDA* of NOK 4 million in the first quarter. The organic growth was 17%.
Design, which includes the Finnish and Swedish design business, had a revenue of NOK 99 million. The organic growth was 10%.
First quarter order intake was NOK 1,480 million. Announced contracts amounted to NOK 957million and unannounced order intake was NOK 523 million. The order backlog for own production amounted to NOK 6,220 million at the end of March. The order backlog in VR Track at closing 7 January 2019 amounted to NOK 3,397 million. Approximately 50% of the backlog is estimated for production in 2019. NRC Group’s interest in the order backlog of joint ventures/ associated companies was NOK 570 million.
New orders included a SEK 221 million contract for track-related work on Söderåsbanan and a SEK 173 million contract for track renewal on the connection between Älmhult – Olofström, both in Sweden. Trafikverket also exercised a SEK 142 million option for maintenance on the railway connections “Blekinge Kustbanan” and “Kust till Kustbanorna” in Sweden. In Finland, NRC Group won a EUR 10.9 million contract for maintenance on the Tampere Tramway through the Tampere Tramway Alliance. In Norway, the company won a NOK 56 million contract for track work at Lodalen driftsbanegård and a NOK 76 million contract for track-related work between Oslo and Ski at the Østfold Line.
On 29 April, subsequent to the quarter, NRC Group was appointed to a contract by The City of Espoo and The City of Helsinki for construction of the Jokeri Light Rail line in Finland. The Jokeri Light Rail project will be executed under the alliance model, together with Finnish YIT. The contract value for NRC Group alone is approximately EUR 220 million. The contract will upon final confirmation become the largest contract awarded to the Group to date. The project includes design and construction work. According to the preliminary project schedule, track construction is planned to commence in June 2019 and the project is scheduled for completion in June 2024. The formal contractual signing of the alliance contract is expected to take place on or about 22 May 2019, however, subject to no political or valid legal objections being raised prior to such date.
With the award of the Jokeri Light Rail contract, NRC Group has been involved in all five rail transport related alliance projects in Finland, including Tampere tramway, which is the largest ongoing alliance project, and the renovation of the Lielahti – Kokemäki railway, the first public infrastructure alliance project in Europe.
Tendering activity remained high in Norway, focused on larger turnkey projects covering several special competencies. This is in line with the Group’s strategic positioning in recent years. The national budget reflects political ambitions for strengthening the railway sector with a record NOK 26.4 billion allocated to 2019, up 12% from 2018. However, the planned investment, maintenance and renewal spending is below the average level of the 2018-29 National Transport Plan (NTP) for a second consecutive year while the maintenance backlog is increasing. These factors indicate continued growth in railway infrastructure investments and activity in Norway.
In Sweden, tendering and award activity rebounded in the first quarter of 2019. The development reflects the planned growth in spending in the NTP for 2019-2030, approved in June last year. The national budget for 2019 shows SEK 11.4 billion in new investments, up 26% from 2018, and maintenance expenditure of SEK 9.3 billion, an increase of 6%.
The Finnish market also remains firm with forecasts of increased investments in 2019. Light rail systems are likely to represent the highest growth rate. Overall growth for the Finnish market is forecasted at an average of 8% annually for the 2018-2022 period.
Investment activity is high in Norway, Sweden and Finland on the back of broad political support for developing rail-based systems to provide environmentally friendly and effective transport systems. Railway, metro and light-rail solutions are sustainable solutions required for efficient transport of people and goods amid population growth and urbanisation. NRC Group holds a leading position in a growing Nordic market with capabilities supporting environmentally friendly operations in all project phases.
The first quarter 2019 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 the largest rail infrastructure entrepreneur in the Nordic region, with strong presence in Norway, Sweden and Finland. The company is a turnkey supplier of all rail related services, in addition to providing services to any transport related infrastructure such as roads, harbours, bridges and tunnels. The services include design, groundwork, trackwork, safety, electro, telecom and signalling systems, and environmental services such as decommissioning and reclamation.
NRC Group has experienced significant growth since its inception in 2011 and is today the leading entrepreneur within rail infrastructure in the Nordics. The company has regional offices throughout Norway, Sweden and Finland and is headquartered at Lysaker, nearby Oslo, In Norway. The group has a revenue of approximately NOK 6 billion and approximately 2,450 employees. NRC Group is listed on the Oslo Stock Exchange under ticker “NRC”. The company’s chief executive officer is Henning Olsen.
For further information, visit www.nrcgroup.com.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.