Veidekke's first quarter results show an improvement compared to the challenging past year. "We've passed safely through the financial crisis. The harsh winter we've endured and the demanding market we are in have taken some toll, lowering our operating revenues by 5% versus the same quarter last year. Today, however, we are experiencing increased activity in housing development, and the Construction segment's orders-on-hand have increased by about 20% from same time last year", says CEO Terje R. Venold.
Veidekke's turnover in the first quarter was MNOK 3 148 (MNOK 3 325). Operating income was MNOK -16 (MNOK -102) while profit before tax was MNOK -14.3 (MNOK -133.5). Orders-on-hand for the Group's Construction segment is of BNOK 12.1 (BNOK 9.9). Following the changes in the Norwegian contractual early retirement scheme (AFP), previous year's pension allocations have been reversed, giving a gain of MNOK 95 in the financial accounts in the first quarter.
"These are still challenging times for our industry with pressure on construction margins. But with good prospects in the property market, the significant lag in public investment in road and rail, as well as our Industry segment's good contract-winning performance for this year's asphalt contracts for the Norwegian Public Roads Administration, gives reason for optimism", says CEO Venold.
Construction segment
A demanding market situation with overcapacity and keen price competition in certain segments put pressure on margins and weakened results. The severe winter has also contributed to higher costs and lower productive efficiency. Turnover for the total segment was BNOK 2.787 (BNOK 2.942) in the first quarter and earnings were MNOK 139 (MNOK 102). Profit margin for the quarter was 5.0% (3.5%).
Property
The positive development from the second half of 2009 continued in the first quarter. In Oslo and Stockholm in particular, housing sales are increasing, and new projects are being initiated. If the trend continues, Veidekke could have up to 1,000 apartments under production by year's end. Sales for Veidekke's Property segment totalled MNOK 134 (MNOK 144) for the quarter while profit ended at MNOK -11 (MNOK -38).
Industry
Industry's activities were also impacted by the harsh winter which led to lower activity within crushed stone and gravel, and recycling. The first quarter is seasonally characterised by low activity regardless, and the quarter is counted as an expense quarter. Total turnover for Veidekke Industry in the first quarter was MNOK 252 (MNOK 275), with earnings of MNOK -127 (MNOK -180).
HSE
Sickness absence for all employees in Norway was 5.6% (5.4%). For all employees in Sweden, sickness absence was 3.1% (2.7%) and in Denmark 2.5% (2.0%). The injury rate (number of lost time injuries per million hours worked) for the entire group was 5.8 (4.5) at the end of the first quarter.
See also the Board's report for the first quarter of 2010 which is attached to this press release.
For more information contact:
President & CEO Terje R. Venold, tel. +47 21 05 77 01 / +47 90 58 23 23
Executive Vice President/CFO Jørgen W. Porsmyr, tel. +47 21 05 76 44 / +47 90 75 90 58
jorgen.wiese-porsmyr@veidekke.no
Communications Director Kai Krüger Henriksen, tel. +47 21 05 77 04 / +47 90 51 93 60,
See also
http://www.veidekke.com/reports/2010/quarter/1/veidekke_in_1_quarter_2010/
VEIDEKKE ASA
| Title | File type |
| Report Q1 2010 |