Veidekke's financial result for the fourth quarter reached NOK 252 million, giving an annual result of NOK 816 million for the year 2008. The turnover was NOK 4,448 million and NOK 19,395 million, respectively.

 

 

- We are well prepared for more difficult times, both financially and organisationally. And we know that there will also be opportunities, which we aim to make the most of, says President and CEO of Veidekke ASA, Terje R. Venold. - For construction operations, the short-term effect of the decline in the market will primarily impact the building area, whereas both the infrastructure area and renovation of public buildings represent significant opportunities ahead, particularly in Norway and Sweden. Here, rescue packages from the government targeted at the building and construction industry, provide a market player like Veidekke with a number of opportunities, adds Mr Venold.

Veidekke's Norwegian construction operations achieved an increase in both turnover and result for 2008, despite a slightly lower turnover in the fourth quarter. The profit margin for 2008 reached a solid 6.6 per cent (6.5 per cent). This may be ascribed to good project margins, a high level of activity and successful utilisation of the production resources, as well as the company's ongoing improvement process. - This is downright impressive, says Mr Venold, who is also pleased to see a significant growth in construction operations in Sweden and Denmark.

The demand for new dwellings has been extremely low throughout 2008. Therefore, no new projects of significance have been started up within property operations in 2008. Instead, the division's resources are now directed towards the active development and improvement of the portfolio of development sites, so that the projects are ready to be realised as soon as the market recovers.

The Industry Division showed an increase in turnover of 13.3 per cent compared with the previous year, but the division's total result was significantly reduced by poor results within operation and maintenance of national and county roads. Substantial write-downs were made within this area, in consideration of possible future losses on some operation and maintenance contracts. Our operations within the asphalt segment achieved a slightly better result than the year before, despite the volume remaining at the same level, while the crushed stone/gravel and recycling segments ended the year with continuing good results.

Veidekke's turnover in Norway amounted to NOK 13,997 million (NOK 13,369 million), and the result was NOK 726 million (NOK 1,205 million).

The financial crisis affected the building industry throughout last year, and Sweden was no exception. This particularly applied to residential and non-residential building, whereas communication and infrastructure are areas which are showing a positive development, and appear to continue to do so.

In spite of the uncertainty in the property market, the Swedish Property Division achieved a strong annual result of NOK 102 million (NOK 113 million). However, Sweden also experienced weak sales in the autumn, and consequently few new projects were started up.

Construction operations achieved an increase in both turnover and results. In Sweden, some capacity adjustments were already made towards the end of the year, in order to meet an expected reduction in activities both within construction and property operations. The turnover in Sweden was NOK 3,177 million (NOK 3,165 million). This gave a profit of NOK 155 million (NOK 109 million).

 

In Veidekke's Danish operations, Hoffmann A/S, capacity adjustments, improved operation, clarification of risk and reversal of allocations for previously completed projects gave a satisfactory result for the fourth quarter. This resulted in an improvement of the annual results from NOK -88.1 million in 2007, to NOK 13.2 million in 2008. Nearly all our Danish construction regions are now delivering solid results, with the exception of building in one region on Zealand and Hoffmann's property division, which are still struggling with poor results. The 2008 turnover in Denmark was NOK 2,101 million (NOK 2,849 million), giving a result of NOK -19 million (NOK -99 million).

Sickness absence for all employees in Norway was 5.3 per cent (5.2 per cent). For all employees in Sweden, sickness absence was 2.8 per cent (3.3 per cent), and in Denmark, the equivalent numbers were 2.2 per cent (3.3 per cent). The injury rate (lost-time injuries per million hours worked) for the whole Group ended up at 4.5 (7.0) for 2008.

We also refer to the Board of Directors' Report for the fourth quarter 2008, which is enclosed with this press release.

Terje R. Venold, President and CEO, Tel. 21 05 77 01 / 905 82 323, terje.venold@veidekke.no

Arne Giske, Executive Vice President and CFO, Tel. 21 05 77 80 / 905 89 526, arne.giske@veidekke.no

Kai Krüger Henriksen, Executive Vice President Communication, Tel. 21 05 77 04 / 90 51 93 60, kai.henriksen@veidekke.no