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Today, 5 November 2019, NRC Group has released its financial results for the third quarter of 2019.

The company will present the results at 11.00 AM (CET) at Arctic Securities offices, Haakon VIIs gt. 5, Oslo. The presentation will be held by CEO Henning Olsen and CFO Dag Fladby.

If you want to attend the presentation, please register by email to:

Below you will find a summary and highlights from the report.

Key figures

  • Revenues of NOK 1,850 million vs NOK 851 million in Q3 2018
  • Total EBITDA* of NOK 153 million vs NOK 71 million in Q3 2018
  • Order intake in the quarter amounting to NOK 1,135 million
  • Order backlog** of NOK 6,852 million

Key events

  • VR Track integration continued as planned 
  • Successful placement of a NOK 600 million senior unsecured bond to increase financial flexibility
  • Subsequent to the quarter, appointed to largest rail contract ever in Norway of NOK 793 million by Bane NOR
  • Divestment of Design segment completed on 1 November as planned 

*  Before other income and expenses (M&A expenses)

**Excluding Design segment which is reported as discontinued operations


Comments on third quarter 2019 results:

Strong growth in revenue and profit

Third quarter revenue was NOK 1,850 million, an increase of 117% from the NOK 851 million reported for the same period of 2018, mainly driven by acquisitions. Group EBITDA* was NOK 153 million and the EBITDA* margin was 8.3%. All key numbers exclude Design being reported as discontinued operations.

The Norwegian operation continued to deliver strong growth and good profitability in the third quarter driven by Construction and Environment. Revenue was NOK 683 million compared to NOK 421 million in the third quarter of 2018. The organic growth was 22%. EBITDA* margin was 10.9%.

Revenue from the Swedish operation amounted to NOK 460 million for the quarter compared to NOK 433 million in the third quarter of 2018. The organic growth was -18%. EBITDA* margin was 2.9%. The performance continued to reflect low profitability due to lower revenue and higher costs than normal. The revenue is affected by low order backlog at the start of 2019 and lower number of smaller projects in the market with execution in 2019. Measures have been taken to improve the profitability.

Finland had revenue of NOK 712 million and an EBITDA* margin of 9.8%. The organic growth continued strong, with 19% in the quarter. The growth was mainly driven by the alliance projects, Tampere Light Rail and Jokeri Light Rail. The EBITDA* margin has decreased somewhat in third quarter compared with the same quarter last year. This is due to that a larger share of the revenue is from alliance projects, and that the Jokeri Light Rail project is in the early phase. In addition, there has been lower volume of smaller core rail projects in the market.

Third-quarter order intake was NOK 1,135 million. Announced contracts amounted to NOK 311 million and unannounced order intake was NOK 824 million. New orders included the EUR 20.7 million contract to build 12.5 km double track between Joutseno and Rauha in Finland. The order backlog for own production (excluding Design) was NOK 6.9 billion at the end of September. Approximately 21% of the backlog is estimated for production in 2019.

Subsequent to the quarter, NRC Group was appointed to the largest ever rail contract in Norway by Bane NOR. The contract is estimated to NOK 793 million and is for a new double track between Nykirke and Barkåker at the Vestfold line as part of the InterCity project.

Following the acquisition of VR Track and the subsequent restructuring of the Swedish operation announced in January 2019, NRC Group stated an expectation of total Group revenue of approximately NOK 6.5 billion, excluding Design, for 2019. Adjusting for the lower-than-expected activity in Sweden, Group revenue is now expected to be in the range of NOK 6.0 billion to NOK 6.2 billion for the full year.

On 12 August, NRC Group entered an agreement for the sale of its Finnish design division, including the subsidiaries Nordic Infrapro AB in Sweden and NRC Arcus Oy in Finland (the operating segment Design) to Sweco for an enterprise value of EUR 42.5 million on a cash and debt free basis with normalised working capital. The divestment was a strategic step to focus on NRC Group's core business, and release resources to drive growth in other business areas. The transaction was closed 1 November. Based on the agreement, the operating segment in the third quarter report has been reclassified to discontinued operations, presented on a single line in the profit and loss accounts. The net proceeds from the transaction has been used to repay parts of NRC Group’s bank debt.

On 29 August, NRC Group announced that the Company had successfully completed an issuance of a NOK 600 million 5-year senior unsecured bond to increase the Group’s financial flexibility. The net proceeds from the bond issue was used to refinance existing short-term bank debt. The transaction was substantially oversubscribed.

The Norwegian market remains active with several ongoing tenders for larger projects covering several special competencies. This is in line with the Group’s strategic positioning in recent years. The 2020 national budget confirmed broad political support to improving the national railway system. Nearly NOK 27 billion is allocated to the railway sector in 2020, up 4.5% from the revised 2020 budget. New investments are expected to increase 8% in 2020 to NOK 13.2 billion on higher construction activity. The budget for operations, maintenance and renewal was up 3% to NOK 8.7 billion, including ERTMS investments of NOK 1.4 billion and at least NOK 2.2 billion in renewal projects. The planned investment, maintenance and renewal spending remains below the average annual level of the 2018-29 National Transport Plan (NTP) for a third consecutive year. The maintenance backlog is expected to increase further to NOK 21 billion at the end of 2020 as renewal investments of NOK 3.5 billion are required to offset actual wear on existing infrastructure. These factors indicate continued growth in railway infrastructure investments and activity in Norway.

Tendering activity in Sweden has increased in 2019 and several projects are expected to be awarded to the market in the late fourth quarter and into first quarter 2020. There will however be a lag before new orders come to execution and impact revenue and margin. In Sweden, the national budget for 2020 forecasts SEK 13.6 billion in new investments, up 30% from revised 2019 figures, and maintenance investments of SEK 10.2 billion, an increase of 1% from revised 2019 spending. In 2021, new investments and maintenance spending are expected to grow by 20% and 18%, respectively. The sum of planned new investments and maintenance spending for the three coming years is estimated to exceed the average annual level for the NTP plan period. 

In Finland, the addressable market is expected to grow from an estimated EUR 0,59 billion in 2019 to an estimated EUR 0,89 billion in 2020. The main drivers for the growth are light rail projects, where NRC Group is already part of the projects in the market, and an expected increase in the renewal and reinvestment, based on Governmental decisions in 2019. In addition, there will be a permanent increase of EUR 300 million in the basic transport infrastructure to reduce the maintenance backlog, on top of the existing budget. NRC Group is estimating that EUR 100 million of the 2020-2022 budgets will be allocated to rail yearly. Maintenance is expected to be quite stable in 2020, with 1% growth.


The third quarter 2019 result report and result presentation can be found attached and will be made available on the company's homepage:

For further information, please contact Dag Fladby, Chief Financial Officer, NRC Group ASA on tel: +47 90 89 19 35.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

About NRC Group

NRC Group is the largest rail infrastructure entrepreneur in the Nordic region. NRC Group has experienced significant growth since its inception in 2011 and has regional offices throughout Norway, Sweden and Finland. The company is headquartered at Lysaker, nearby Oslo, in Norway. NRC Group is listed on the Oslo Stock Exchange under ticker "NRC". The company's chief executive officer is Henning Olsen. This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.