Strong figures from Veidekke
Veidekke has once again reached its targets of a 5% profit margin and a 20% return on equity. In 1998 its profit margin was 5%, while return on equity was 23.1%. Turnover increased by 14% to NOK 5,645 million, giving a pre-tax profit of NOK 282.3 million.
In 1998 Veidekke concentrated, among other things, on increasing its property portfolio for residential and non-residential development. A new company, Veidekke Construction AB (Vecon) was established in Sweden. The Industrial Division's core activities, asphalt, crushed stone and gravel, were expanded and Veidekke has taken up a leading position in the ready-mix concrete market. Another company, Veidekke Gjenvinning (waste recycling), was started and Bautas has grown to become one of the leading machinery hire companies in building and heavy construction.
These new priority areas have led to greater involvement in the value chain in building and heavy construction and they give us the possibility of exploiting expertise and operation-related synergies between the different divisions in the Group. They also give Veidekke breadth and new growth potential and thus the ability to level out market fluctuations, says Mr Venold.
Profit performance
Veidekke achieved a turnover for 1998 of NOK 5,645 million (NOK 4,961 million), giving a pre-tax profit of NOK 282.3 million (NOK 270.4 million) and a profit margin of 5.0% (5.5%). The aggregate profit for the Building, Heavy Construction and Industry divisions was NOK 249.7 million and this gave an average profit margin of 4.5%. This is a considerable improvement on last year's figures, which showed a profit of NOK 181.6 million and a margin of 3.7%. The Property Division posted a profit of NOK 37.3 million (NOK 90.5 million).
The Group's operating profit was NOK 287.8 million (NOK 248.6 million). Net financial items for the year amounted to NOK -5.5 million (NOK 21.8 million). Orders-on-hand for Building and Heavy Construction are good as regards both quantity and quality. At the end of the year, the order books showed a total of NOK 2,682 million (NOK 2,710 million).
Earnings per share were NOK 16.52 (NOK 16.13) and return on equity was 23.1% (26.5%). At the Annual General Meeting in April, the Board of Directors will propose a dividend of NOK 5 per share for 1998 (NOK 4.75).
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