Veidekke ASA: High level of activity and record-high order backlog
Veidekke's activity is at a high level and the Group's total order backlog is NOK 18.2 billion, which is an increase of 11% from year-end. The Group's total revenue for the quarter was NOK 5.4 billion, which is the same as the corresponding quarter the previous year. Earnings amounted to NOK 145 million, compared with NOK 166 million in the second quarter of 2012. "Earnings were boosted by the encouraging growth in earnings for Construction Norway and the Swedish residential operations, but unfortunately they were also affected by losses for Construction Sweden," says President and CEO Arne Giske.
Veidekke's revenue for the second quarter was NOK 5.4 billion (NOK 5.4 billion for Q2 2012). Profit before tax was NOK 145 (166 ) million. Earnings per share was NOK 0.8 (0.9). The Group's total order backlog ended the quarter on NOK 18.2 (16.9) billion. The figures are taken from the segment accounts.
Construction operations
Total revenue for construction operations in the second quarter was NOK 4,285 (4,178) million, while earnings were NOK 87 (100) million. The profit margin was 2.0% (2.4%), while the order backlog ended the quarter on NOK 16,536 (15,575) million, which is its highest level ever.
Revenue for the Norwegian construction operations increased by 7% compared with the same period the previous year. The increase is due to high activity in the building and construction market and good access to appropriate projects. The profit margin was 2.7% (2.3%). Both the building and construction operations showed growth in earnings.
Earnings for construction operations in Sweden were affected by a volume decline and some project write-downs. This was largely related to tunnel and building activities in Stockholm. The other units reported positive results, although the overall the profit margin ended the quarter on -0.8% (2.6%).
The profit margin for the Danish construction operations increased to 3.5% (2.8%) during the quarter, due to a higher quality project portfolio.
Property development
Total revenue for property operations was NOK 426 (575) million. The decline was largely due to the fact that several large projects with a high sales ratio are nearing completion and also due to slightly lower production. Earnings rose to NOK 40 (26) million.
In Norway, activity and earnings were in line with the previous year, while Sweden reported a rise in activity and an emphatic increase in earnings.
The number of units under construction at the end of the quarter was 1,300 (Veidekke's share), compared with 1,321 at the same point the previous year. The portfolio sales ratio was 76%. The Group's portfolio of sites in Norway and Sweden contained 13,400 units at the end of the quarter.
Industry
Industrial operations reported a high level of activity in the second quarter, despite a late start to the year's asphalt season. Total revenue amounted to NOK 900 (912) million, while earnings were NOK 36 (46) million. The profit margin for Asphalt maintained a good level after production started. Earnings for Road Services and Crushed Stone and Gravel increased compared with the same period in 2012. The order backlog was NOK 1,743 (1,357) million.
Health, safety and environment (HSE)
The company's injury and absence figures show a downward trend throughout the organisation, but unfortunately we had a fatal accident in Norway in May.
The LTI rate for the Group in the second quarter was 6.4 (8.9). Sickness absence during the quarter was 5% (5.1%) for all employees in Norway, compared with 3.4% (3.7%) in Sweden and 1.5% (2.6%) in Denmark.
See also the Board of Director's report for the second quarter of 2013, which is attached to this press release.
For more information, please contact:
President and CEO Arne Giske, tel. +47 905 89 526, arne.giske@veidekke.no
Exec. Vice-President and CFO Jørgen Wiese Porsmyr, tel. +47 907 59 058,jorgen.wiese-porsmyr@veidekke.no
Communications Director Grete Ingeborg Nykkelmo, tel. +47 913 11 000,grete.nykkelmo@veidekke.no
Veidekke is one of Scandinavia's leading contractors and property developers with a turnover of NOK 20 billion (2012) and 6,300 employees. Activities include building and construction projects, residential development, asphalt operations, crushed stone and gravel and road services. Our values are professional, honest, enthusiastic and ground-breaking. Our health, safety and environment goals have equal status with our financial goals. Veidekke is characterised by a strong corporate culture with employee involvement and co-ownership as important cornerstones. More than half of the employees are co-owners, holding around 20% of the Group's shares between them. The company is listed on the Oslo Stock Exchange and has reported a profit since it was founded in 1936.