Veidekke ASA: Q1 2020 results
Veidekke generated revenues of NOK 9.0 billion and a pre-tax loss of NOK 16 million in the first quarter. The construction operation order book stood at NOK 35.0 billion at quarter-end. The group’s loss per share in the quarter totalled NOK 0.70 (IFRS).
“Since the COVID-19 outbreak reached Scandinavia, Veidekke has focused on limiting the spread of the virus and maintaining production. The steps we have taken have protected staff health and jobs, ensured that customer deliveries could be made as agreed and safeguarded the group’s assets,” says group CEO Jimmy Bengtsson.
“The pandemic had a limited impact on production in construction and civil engineering projects and residential sales in the first quarter. However, the longer term outlook has become far less clear. While our long-term objectives remain unchanged, our 2020 profit forecast is highly uncertain,” says Bengtsson.
“The construction and civil engineering sector is at a later stage of the economic cycle than many other industries which were hit hard earlier on. We are working hard to find solutions for our own operations, and are also cooperating with other stakeholders and the authorities on initiatives to keep our industry moving forward,” says Bengtsson.
Work is continuing on the establishment of a new ownership structure for the property development operation, and the choice of ownership structure will as stated be decided before the end of the second quarter. As announced, the industrial and civil engineering operations in Norway will be more closely amalgamated as part of the group’s improvement project.
Veidekke achieved revenues of NOK 9.0 billion in the first quarter, compared to NOK 8.5 billion in the same period last year. Both the construction and property development operations improved revenues, while the industrial operation recorded a revenue drop of 8% compared to Q1 2019.
The group’s Q1 pre-tax loss of NOK 16 million compares to a loss of NOK 21 million in Q1 last year. The loss calculation includes an unrealised loss of NOK 65 million linked to changes in the value of financial items, an unrealised foreign exchange loss linked to the industrial operation and NOK 20 million in costs related to the process of selling the property development operation. The construction operation achieved a profit of NOK 194 million in the quarter, compared to NOK 148 million in Q1 2019. The property development operation generated a profit of NOK 101 million, up from NOK 57 million last year. The industrial operation’s loss of NOK 222 million was normal for this part of the year – the low season for asphalting activity – and was additionally impacted negatively by an unrealised foreign exchange loss.
The first-quarter order intake of NOK 7.2 billion brought the construction order book to NOK 35.0 billion as at quarter-end, on a par with the same time last year. Approximately two-thirds of the order book is due to be converted into revenue over the next 12 months.
Net interest-bearing debt amounted to NOK 2.6 billion at quarter-end. Veidekke has sufficient financial capacity to manage a challenging market situation, having refinanced its borrowing facilities towards the end of 2019, with increased credit limits. First-quarter cash flow was unusually strong thanks to very high project liquidity in Denmark and Sweden, and foreign exchange effects. Liquidity has also benefited from the decision not to distribute a dividend for 2019 in response to uncertainty about the further impact of the COVID-19 pandemic.
The number of injuries reported in the first quarter was historically low, and Q1 2020 represents the group’s first ever quarter without any serious injuries. The group LTI (lost time injury) rate, which measures the number of injuries per million hours worked, was 4.0 in the first quarter, on a par with the preceding quarter and down from 5.0 in Q1 2019. Veidekke’s sick leave rate was 4.1%, compared to 4.0% in Q4 2019 and 4.6% in Q1 2019.
For more information, please contact:
- Group CEO Jimmy Bengtsson, tel. +47 984 70 000, jimmy.bengtsson@veidekke.no
- Finance Director Jørgen G. Michelet, tel. +47 917 43 856, jorgen.michelet@veidekke.no
- EVP Communications and Public Affairs Lars Erik Lund, tel. +47 413 31 369, lars.lund@veidekke.no
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This information is subject to a disclosure duty pursuant to section 5-12 of the Securities Trading Act.
Veidekke is one of Scandinavia's largest construction and property development companies. The company undertakes all types of building construction and civil engineering contracts, develops residential projects, maintains roads, and produces asphalt and aggregates. The company is known for its involvement and local knowledge. Its annual turnover is approximately NOK 39 billion, and half of its 8,600 employees own shares in the company. Veidekke is listed on the Oslo Stock Exchange and has always posted a profit since it was founded in 1936.