Veidekke ASA: Increased revenue and good order intake

Revenues for the second quarter of 2017 were NOK 8.3 billion, an increase of 3% compared with the second quarter of 2016. Profit before tax was NOK 421 million, compared with NOK 450 million for the same period last year. Veidekke's order intake for the quarter was NOK 8.4 billion. This gave a total order backlog of NOK 29.1 billion. Earnings per share were NOK 2.5 (2.6) in accordance with the segment accounts.

Veidekke's revenues for the second quarter amounted to NOK 8.3 (8.1) billion. The increase is attributed to the property development operations, where residential production was high, particularly in Sweden. Profit before tax for the second quarter was NOK 421 (450) million.

The order intake of NOK 8.4 billion in the second quarter resulted in a total order backlog of NOK 29.1 billion. This is the highest order backlog ever reported by Veidekke.

"Veidekke can look back on a quarter with high revenues, a strong order intake and high residential production. The Group showed a solid profit, and the property development operations reported a good result, while parts of the construction operations reported low profitability", says CEO and President Arne Giske.

Revenues in Veidekke's construction operations totalled NOK 6.5 (6.5) billion and profit before tax was NOK 193 (228) million in the second quarter. Revenue and earnings growth were reported for both the Swedish and Danish operations, while lower revenues and earnings were reported for the Norwegian operations. 

"Solid results were reported for most parts of the construction operations. The earnings were nevertheless weakened in Norway by a low level of construction activity in Southern and Western Norway as a result of the decline in economic activity, and weak profitability in the civil engineering operations. We have implemented measures to improve our profitability and manage the market and capacity situation", says CEO and President Arne Giske.

Revenue from the property development operations increased to NOK 1.2 billion from NOK 863 million in the second quarter of last year. Profit before tax amounted to NOK 159 (161) million for the quarter. A total of 422 (617) residential units were sold in the second quarter, including jointly owned projects. The combined sales ratio for residential units under construction was 86%.

"Residential production increased sharply this quarter. Veidekke's residential projects have sold well, and we have launched several projects, primarily in Sweden. After a long period of rapidly rising prices and measures taken by the authorities to slow this down, as well as an increased supply of new residential units, we are now seeing a normalization of the market with a levelling off of prices. We are still seeing good demand and a high sales ratio in our projects", says Giske. 

The industrial operations reported a high level of activity in the second quarter, with revenues of NOK 1.2 (1.2) billion and profit before tax of NOK 85 (84) million.

Veidekke's total LTI rate (number of lost time injuries per million hours worked) for the last 12 months was 4.2 at the end of the second quarter, which is on par with the previous quarter and down from 4.7 for the same period last year. Sickness absence was 3.7% (3.5%) In April, an employee of one of our subcontractors lost his life while working on one of Veidekke's projects in Norway. The investigation of the accident is still ongoing.

For press photos, see www.flickr.com/photos/veidekke, for more information, contact:
President and CEO Arne Giske, tel. +47 905 89 526, arne.giske@veidekke.no
SVP Finance Jørgen G. Michelet, tel. +47 917 43 856, jorgen.michelet@veidekke.no
EVP Communications and Public Affairs Lars Erik Lund, tel. +47 413 31 369, lars.lund@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 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 30 billion and around half of its 7,400 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.