Veidekke ASA: Strong growth and higher profits

Veidekke can look back on a quarter with strong growth and clearly improved profits. Revenue totalled NOK 7.4 billion, while profit before tax was NOK 597 million. The order intake for the quarter was NOK 4.2 billion.

Veidekke reported revenue of NOK 7.4 billion in the third quarter of 2016, an increase of NOK 1.5 billion from the third quarter of 2015. Profit before tax was NOK 597 million, compared with NOK 390 million for the same period last year. The profit includes a positive one-off effect of NOK 90 million as a result of a change to the disability pension scheme in Norway.

In the first nine months of the year Veidekke had revenue of NOK 21.4 billion and a profit before tax of just over NOK 1 billion.

"Most of the revenue growth in the quarter is from construction operations and reflects the strong order intake during the last two years. The improvement in profits can be attributed to stronger positions in the construction operations, but also increased residential production," says President and CEO Arne Giske.

The Group had an order intake of NOK 4.2 billion in the third quarter, resulting in a total order backlog of NOK 25.3 billion at the close of the quarter. The figures are from the segment accounts. Earnings per share (IFRS) was NOK 3.1 (1.8).

Veidekke's construction operations reported revenue of NOK 5.9 billion in the third quarter, compared with NOK 4.5 billion in the third quarter of 2015. Profit before tax was NOK 283 million, against NOK 163 million for the same period last year.

"There is still a high level of activity in the construction operations in all three countries. However, there is tough competition for major infrastructure contracts in Sweden and Norway, from both established competitors and new entrants," says Giske.

Property Development recorded revenue of NOK 454 million, compared with NOK 479 million in the third quarter of 2015. Profit before tax was NOK 125 million, which is a solid improvement from the profit for the same period last year of NOK 52 million. There were 2,837 residential units under construction at the close of the third quarter, of which Veidekke's share was 2,146. The corresponding figure for the same period in 2015 is 2,289, of which Veidekke's share was 1,684. Projects under construction had a total sales ratio of 93%.

"We continue to have high residential sales in our main markets. So far this year we have sold homes for NOK 6.3 billion, which will contribute to further increases in residential production going forwards, primarily in Sweden," says Giske.

Veidekke's industrial operations reported revenue of NOK 1.4 billion in the third quarter, which is in line with the revenue in the third quarter of 2015. Profit before tax was NOK 198 million, compared with NOK 192 million for the same period last year.

"The summer half of the year is the high season for both Asphalt and Aggregates, and thanks to high demand and good operations in these areas, Industrial has delivered a solid profit," concludes Giske.

Veidekke's total lost-time injury (LTI) rate (the number of injuries per million hours worked) was 3.9 at the close of the third quarter, down from 4.7 in the third quarter of 2015. Sickness absence remained stable and low at 3.2%.

For press photos, see www.flickr.com/photos/veidekke, for more information, contact:
President and CEO Arne Giske, tlf 905 89 526, arne.giske@veidekke.no
CFO Terje Larsen, tlf 906 87 851, terje.larsen@veidekke.no
Communications Manager Helge Dieset, tel. (+47) 905 53 322, helge.dieset@veidekke.no

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Veidekke is one of Scandinavia's largest construction and property development companies. The company undertakes all types of building and construction contracts, maintains roads and produces asphalt and aggregates. The company's operations are characterised by involvement and local knowledge. Revenue is NOK 24.5 billion (2015), and half of the 7,000 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.