Veidekke ASA: Update on the consequences of the coronavirus pandemic
Veidekke is taking steps to limit the spread of the coronavirus while at the same time safeguarding operations and deliveries to customers. The outbreak has so far had limited effect on the progress of the group’s construction projects and residential sales, but government restrictions and considerable uncertainty about future markets should be expected to affect Veidekke's operations in all three Scandinavian countries.
The concern for life and health is always Veidekke's first priority, and the company has implemented a number of measures to protect employees and those working at Veidekke's sites against the spread of the coronavirus. Veidekke complies with the authorities' requirements, recommendations and regulations in Norway, Sweden and Denmark respectively.
Production in the construction projects is generally progressing as normal, but at somewhat lower capacity, and this affects both turnover and progress in the projects. Veidekke currently has few temporary layoffs as a result of the coronavirus pandemic, but is continuously assessing the need for further adjustments to the expected level of activity.
For the industrial operation, the consequences of the coronavirus come on top of an already challenging market situation for the Norwegian asphalt operation, as communicated in the fourth quarter report.
Veidekke’s property development operation has made a number of adjustments to prevent virus transmission. Last week, the Gartnerkvartalet residential project in Oslo conducted an online open house, which attracted many visitors. Veidekke's report on property sales in the first quarter will be published on Friday 3 April.
“At present, we have no basis for assessing the extent or duration of the ongoing extraordinary infection control measures. Should the measures be prolonged and escalate, significantly reduced production and lower demand are to be expected. If the measures are of a more limited duration, ongoing production volumes and order backlog indicate good activity in all three countries through 2020,” says Jimmy Bengtsson, CEO of Veidekke ASA.
Veidekke has a good order backlog, a solid financial position and a sound financial capacity. At year-end, the contracting business’s order book amounted to NOK 34.3 billion. Equity at year-end amounted to NOK 4.0 billion, and net interest-bearing debt was NOK 2.7 billion.
In December 2019, Veidekke entered into a new two-year NOK 3.6 billion loan agreement, which comes in addition to a NOK 2.3 billion credit facility. At the onset of 2020, unutilised credit amounted to NOK 4.5 billion.
For more information, contact:
Jørgen G. Michelet, Finance Director tel. +47 917 43 856, email@example.com
Lars Erik Lund, EVP Communications and Public Affairs, tel. +47 413 31 369, firstname.lastname@example.org
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 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.