Veidekke with a Good End to a Challenging Year
Veidekke with a Good End to a Challenging Year
Veidekke had a good fourth quarter showing a profit of MNOK 212, while profit for 2009
was MNOK 523.
"Our construction operations managed to maintain good margins despite significantly lower turnover, and our orders-on-hand increased towards the end of the year. Housing production and sales picked up in the fourth quarter, so we are very pleased with the results for both the fourth quarter and for the whole of 2009", said Terje R. Venold, Veidekke's President and CEO.
Veidekke's turnover in 2009 was MNOK 15,558 (MNOK 19,395 in 2008). Operating profit was MNOK 495 (MNOK 796), while earnings before tax was MNOK 523 (MNOK 816). The result per share was NOK 3.- (NOK 4.50), and the Board of Directors proposes a dividend of NOK 2.50 per share (NOK 2.50 in 2008). Orders-on-hand for the Group's construction operations at year's end was NOK 12.3 billion (NOK 10.6 billion).
From financial crisis to recession
"Fourth quarter results show that Veidekke has come relatively safely through the financial crisis. The Group has a strong financial position with a positive interest-bearing position of MNOK 101 and equity capital, up by 2.8 points to 26.4%, has been strengthened. We also see that orders-on-hand and housing sales are increasing. Our internal improvement processes are paying off, and we have maintained expertise and capacity in our organisation. I believe therefore that Veidekke is well positioned for 2010, which will be also a challenging year," added Venold.
"What I am least satisfied with in 2009 is the injury rate development and sickness absence in Norway, which remains high. With three deaths on our worksites and an increasing injury rate, safety must be at the absolute top of everyone's agenda from now on," declared Terje Venold. A good and safe working environment is one of the most important preconditions for profitable and solid growth.
Construction Operations
Despite a challenging market, Veidekke achieved good earnings in its construction activities as a result of efficient operations and favourable cost developments in the supplier market. Norway was again the main engine driving construction operations, but in Denmark and in large parts of Sweden, Construction also achieved very respectable margins. In Sweden, in the Gothenburg region in particular, the market is difficult and results are the weakest. Orders-on-hand at year-end increased in Norway by 30 per cent and in Sweden by 29 per cent (in local currency), while in Denmark they declined slightly due to a very difficult market.
Construction operations had a total fourth quarter turnover of MNOK 3,225 (MNOK 3,833) and a result of MNOK 223 (MNOK 266). The profit margin ended at 6.9% (as for the previous year). Turnover for all of 2009 was MNOK 12,095 (MNOK 15,534) and profit was MNOK 606 (MNOK 774).
Property Development
The fourth quarter was marked by increasing sales and new initiated projects. Although it is far from the level of activity before the financial crisis, the trend is positive. 91 dwellings were sold in the fourth quarter in Norway with the same number in Sweden, while in all of 2008 41 dwellings were sold in Norway and 86 in Sweden.
Fourth quarter sales for Veidekke's Property operations ended at MNOK 227 (MNOK 220) with earnings ending the year at MNOK -26 (MNOK 17). For 2009 sales ended at MNOK 711 (MNOK 1,402) with earnings of MNOK -74 (MNOK 19).
Industry
Industry operations, after many challenges in 2009, concluded the year satisfactorily. Many improvements were completed during the year, and an extended asphalt production as a result of good weather conditions led to volume growth and improved earnings.
Veidekke's Industry operation's total turnover for the fourth quarter was MNOK 755 (MNOK 719), and earnings were MNOK 8.6 (MNOK -29). Turnover for 2009 was MNOK 2,968 (MNOK 3,293), while earnings were MNOK 7 (MNOK 68). The decrease in revenue resulted from the transfer of demolition/plant contracting operations to Veidekke Construction.
HSE
Sick leave for all employees in Norway was 5.7% (5.3%). For all employees in Sweden, sick leave was 3.1% (3.0%), and in Denmark 2.4% (2.2%). The injury rate (number of lost-time injuries per million hours worked) for the Group was 5.7 (4.5) as of fourth quarter.
See also the Board's report for on the fourth quarter of 2009, which is attached to this press release.
For more information contact:
President and CEO Terje R. Venold, Tel. +47 21 05 77 01 / +47 90 58 23 23, terje.venold@veidekke.no
CFO Jørgen W. Porsmyr, Tel. +47 21 05 76 44 / +47 90 75 90 58, jorgen.wiese-porsmyr@veidekke.no
Director Communications and Public Affairs Kai Krüger Henriksen, Tel. +47 21 05 77 04 / +47 90 51 93 60, kai.henriksen@veidekke.no
See also:
http://www.veidekke.com/reports/2009/quarter/4/veidekke_in_4_quarter_2009/
VEIDEKKE ASA
Veidekke ASA is a leading Scandinavian contractor and property developer with 6 000 employees and an annual turnover of NOK 15.6 billion (2009). The Group is listed on the Oslo Stock Exchange and has a broad ownership structure, under which the employees own 19.3per cent of the shares. The Group's operations cover a wide range of building and construction contracts, the development of housing and non-residential buildings for private and public sector clients, asphalt operations and road maintenance, as well as the collection and recycling of waste.