Increased activity and good results for Veidekke

"We are pleased with the result given our competitive situation, and now see more signs of improvement. Increased activity and orders-on-hand for our construction operations in Norway and Sweden, strengthened housing sales, the start-up of more new housing units, and better market prospects provide us with positive opportunities ahead", says CEO Terje R. Venold.

Veidekke's turnover in the second quarter was MNOK 4,327 (MNOK 4,186 in second quarter 2009). Earnings before tax was MNOK 163 (205 MNOK), earnings per share were NOK 0.90 (NOK 1.60), and the profit margin ended the quarter at 3.8% (4.9%). Orders-on-hand for the Group's construction operations now total MNOK 12.3 (MNOK 10.8).

"So far in 2010, Veidekke's results show that we continue to find ourselves in a difficult market situation with a lot of excess capacity and tough competition. Overall, as a result of how Veidekke handled the recession, the Group stands strong today, both organisationally and financially, with the level of activity as well as developments on the property side showing signs of improvement compared with previous years", says CEO Venold.

Construction
Turnover in construction operations increased in the quarter, with the increase coming primarily from the construction segment in Norway and Sweden. Excess capacity resulted in lower margins in Norway, however, while margins in Sweden and Denmark improved somewhat. Turnover for total construction activities in the second quarter was MNOK 3,294 (MNOK 3,088) with earnings of MNOK 110 (MNOK 140). Profit margin came to 3.3% (4.5%).

Property development
The property market around the largest cities in Norway and Sweden - the "family dwelling" segment in particular - shows a gradual improvement. A total of 159 housing units were sold in the quarter, compared with 107 in the first quarter. The number of units in production was 614, compared with 310 at year's start. Sales for Veidekke's property operations in the second quarter totalled MNOK 306 (MNOK 236) with earnings of MNOK 13 (MNOK 2.5).

Industry
A late spring delayed the start of the asphalt season and, combined with a weak private market, yielded weaker asphalt results. The crushed stone, gravel and recycling business units achieved satisfactory results which were on par with 2009, while road maintenance still shows a deficit. Total turnover for Veidekke Industry in this year's second quarter was MNOK 849 (MNOK 876), with an earnings result of MNOK 48 (MNOK 64). 

HSE
Sickness absence for all employees in Norway was 5.5% (5.5%). For all employees in Sweden, sickness absence 3.1% (2.8%) and for Denmark it was 2.5% (2.1%). The injury rate (number of lost time injuries per one million hours worked) for the entire group was 5.4 (4.3) in the second quarter. 

See also the Board's report for the second quarter of 2010, attached to this press release.
 
For more information contact:

President & CEO Terje R. Venold, tel +47 21 05 77 01 / +47 90 58 23 23, terje.venold@veidekke.no

Executive Vice President / CFO Jørgen W. Porsmyr, tel +47 21 05 76 44 / +47 90 75 90 58, jorgen.wiese-porsmyr@veidekke.no

Communications Director Kai Krüger Henriksen, tel +47 21 05 77 04 / +47 90 51 93 60,  kai.henriksen@veidekke.no

See also
http://www.veidekke.com/reports/2010/quarter/2/veidekke_in_2_quarter_2010/

VEIDEKKE ASA

Veidekke is one of Scandinavia's largest contracting firms, with 6,000 employees and revenues of NOK 16 billion. Its business includes building and construction projects, housing developments, asphalt plants, crushed stone and gravel, road main­tenance and recycling. Our values are professionalism, honesty, enthusiasm and innovation. Our goals for health, safety and the environment, HSE, are on a par with our financial goals. Veidekke is characterized by a decentralized organizational model with a strong corporate culture and a high degree of employee involvement. Over half of our employees are shareholders; together they own a 20 % stake in Veidekke. The company is listed on the Oslo Stock Exchange and has never posted a loss since its founding in 1936. 

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)