Veidekke: A good result in a demanding market
Veidekke achieved a profit of MNOK 205 and a turnover of BNOK 4.2 in the second quarter of the year.
- The financial crisis has made its mark, but we are pleased that we have managed to maintain good margins, and that we now have a strengthened order backlog. This does not mean that the economic downturn is over, but we are seeing progress in several areas. We are particularly pleased with the increase in sales of housing, says President and CEO of Veidekke ASA, Terje R. Venold.
Veidekke's turnover in the second quarter reached MNOK 4,186 (MNOK 5,581). The consolidated operating profit amounted to MNOK 180 (MNOK 266) and the profit margin was 4.9 (5.1), while earnings before tax totalled MNOK 205 (MNOK 285), giving earnings per share of NOK 1.20 (NOK 1.50). The orders-on-hand for the Group's construction operations amount to BNOK 10.8 (BNOK 12.6).
- Good margins, but lower activity is a fair summary of Veidekke's second quarter of 2009. In the private sector, the building market is still weak, but this is to some extent offset by a high level of activity in the construction market, states Mr. Venold. - Even though these are demanding times, there are fortunately some bright spots: We have sold 114 housing units in Norway and Sweden this quarter, as against 127 in all of 2008. And the order backlog of construction operations is once again growing, after seven quarters of decline, concludes Mr. Venold.
Construction operations
Construction operations in Norway continued to maintain good operational management and high project margins throughout the second quarter. In spite of a substantial decrease in turnover, the division managed to keep up a strong profit margin. Stockholm also upheld good operational management and profit margins, while the results for the other Swedish regions reflect a low level of incoming orders in the preceding quarters. Our Danish operations, Hoffmann, showed a positive profit trend, despite a tough market situation.
The total turnover for construction operations amounted to MNOK 3,088 (MNOK 4,377), giving a profit of MNOK 140 (MNOK 212).
Property development
During the last few months, we have seen a gradual improvement in the property market, and the sale of completed dwellings has picked up, especially in the areas around Oslo and Stockholm. During the second quarter, Veidekke sold 63 housing units in Norway, as against 41 in the whole of 2008. The corresponding numbers for Sweden are 51 sold dwellings, compared with 86 in all of 2008.
Veidekke's property development operations had a turnover of MNOK 236 (MNOK 387) in the second quarter, and achieved a profit of MNOK 2.5 (MNOK 13.9).
Industry
The second quarter was characterised by a high level of activity within all our industrial business areas, and demand showed a significantly more positive trend than in the first quarter. Volumes for asphalt and crushed stone and gravel were on a level with 2008, and a high level of production and good exploitation of resources has contributed positively to the results. A similar development was seen in recycling.
The total turnover for Veidekke Industri (industry) was MNOK 876 (MNOK 982), and the profit amounted to MNOK 64 (MNOK 68).
HSE
Sickness absence for all employees in Norway was 5.5 per cent (5.3 per cent). For all employees in Sweden, sickness absence was 2.8 per cent (3.2 per cent), and the equivalent numbers for Denmark were 2.1 per cent (2.8 per cent). The injury rate (lost-time injuries per million hours worked) for the whole Group ended up at 4.3 (6.1) for the second quarter.
We also refer to the Board of Directors' report for the second quarter of 2009, which is enclosed with this press release.
For further information, please contact:
Terje R. Venold, President & CEO, Tel. 21 05 77 01 / 90 58 23 23
Jørgen W. Porsmyr, Executive Vice President/CFO, Tel. 21 05 76 44 / 90 75 90 58
Kai Krüger Henriksen, Executive Vice President Communication, Tel. 21 05 77 04 / 90 51 93 60 kai.henriksen@veidekke.no
VEIDEKKE ASA
Veidekke ASA is a leading Scandinavian building contractor and property developer with 6,250 employees and an annual turnover of BNOK 19.4 (2008). Veidekke is listed on the Oslo Stock Exchange. It has a wide group of shareholders and 18 per cent of the shares are held by the company's employees. The company's activities cover a large range of building and construction contracts, development of housing and commercial projects for private and public customers, asphalt operations and road maintenance, and collection and recycling of waste.