Veidekke ASA: Continued growth and record-high order backlog for Veidekke

Veidekke increased its revenue by 5% in 2017 to NOK 31.6 billion, while profit before tax for the year came to NOK 1.4 billion, on par with 2016. Earnings per share in accordance with the segment accounts was NOK 9.4. Order intake has been high in all three countries, resulting in a historically high order backlog. Based on the company's performance and outlook, the Board proposes an ordinary dividend of NOK 5.0 per share for the 2017 financial year.

"Veidekke delivered both growth and good results in 2017 and is starting the new year with a record-high order backlog. This growth is in spite of more varying market conditions, proving that Veidekke's size, geographical spread and professional breadth make us more robust when facing changes in the markets and parameters," says President and CEO Arne Giske.

The Group as a whole had a slightly higher revenue and profit in 2017 than for the previous year. Revenue in 2017 was NOK 31.6 billion, an increase of 5% from 2016. Profit before tax for 2017 was up 6%. Earnings per share was NOK 9.4 (9.3).

Veidekke's revenue in the fourth quarter of 2017 totalled NOK 8.8 (8.7) billion, while profit before tax was NOK 437 (429) million. Earnings per share in accordance with the segment accounts was NOK 3.2 (3.1).

The Group's total year-end order backlog increased by 33% from 2016 to 2017, to NOK 32.6 (24.4) billion, of which around NOK 20 billion will generate revenue in 2018. Order intake in the fourth quarter of 2017 amounted to NOK 8.5 billion, an increase of 37%, compared with NOK 6.2 billion in Q4 2016.

Veidekke's construction operations had revenue of NOK 7.4 (6.9) billion in the fourth quarter of 2017. Sweden and Denmark provided the revenue growth of 7% compared with the fourth quarter of 2016. In Norway, profits declined due to low activity and weak profitability in southern and western Norway. Profit before tax for construction operations is 37% higher, at NOK 254 (185) million.

"Construction achieved solid results in all three countries, with a rising profit margin and increased order backlog after measures in both the building construction and civil engineering operations. While Sweden and Denmark have had good developments in revenue, the picture in Norway is more differentiated, with good profitability for building construction operations in eastern and central Norway, but challenges in southern and western regions. The civil engineering segment is improving, but still has weak profitability," says Giske.

Property Development had revenue of NOK 863 million in the fourth quarter of 2017. This is considerably lower than in the corresponding period in 2016 (NOK 1.3 billion), which had extraordinarily high revenue. Profit before tax from property development operations was NOK 114 million in the fourth quarter, compared with NOK 226 million in Q4 2016, when development gains and a special project contribution resulted in an unusually high profit.

Including jointly owned projects, 213 residential units were sold in the fourth quarter of 2017, compared with 417 in Q4 2016. Veidekke had 2,620 (2,422) residential units under construction at the close of the quarter. The total sales ratio for projects under construction in the quarter was still high, at 83%, although it is slightly lower than for the same period last year (91%).

"As expected, the residential market declined in both Norway and Sweden last year, after three years of upswing culminating in the record year 2016. The number of residential units under construction is still higher than one year ago, and the sales ratio remains high. Although market uncertainty makes home buyers more hesitant, we are seeing positive signs in the better balance between supply and demand," says Arne Giske.

Industrial had revenue of NOK 1.3 (1.1) billion in the fourth quarter of 2017. The profit before tax of NOK 87 (34) million includes NOK 70 million from the sale of a commercial site near Gardermoen. The increase in revenue is primarily attributed to asphalt operations, where a combination of lower prices and higher costs nevertheless resulted in a weaker profit.

"Asphalt's revenue growth was cancelled out by lower prices and higher costs of raw materials, among others, but the profit for the quarter was boosted by the sale of Hovinmoen. This is a good example of how Veidekke creates added value and capitalises throughout the entire value chain of capacity and competencies, from project development to construction and industrial activities," says Arne Giske.

In line with Veidekke's ambitious occupational health and safety goals, the number of serious injuries was reduced by 46% and the total number of injuries by 23% in 2017. The Group's total lost-time injury (LTI) rate, indicating the number of injuries per million hours worked, went down to 4.2, compared with 4.6 in the previous quarter and 4.5 in the fourth quarter of 2016. Sickness absence rose slightly, to 4.0%, compared with 3.6% in the previous quarter and 3.7% in Q4 2016.

For press photos, see www.flickr.com/photos/veidekke, for more information, contact:


President and CEO Arne Giske, +47 905 89 526, arne.giske@veidekke.no
SVP Finance Jørgen G. Michelet, +47 917 43 856, jorgen.michelet@veidekke.no
Communications Manager Helge Dieset, +47 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 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 approx. NOK 32 billion, and around half of its 7,700 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.