Veidekke ASA: Solid order intake and revenue growth

Revenue for the third quarter of 2017 totalled NOK 7.9 billion, an increase of 6% compared with the third quarter of 2016. Profit before tax amounted to NOK 523 million, compared with NOK 507 million, excluding a positive non-recurring effect of NOK 90 million, for the corresponding period last year. Earnings per share in accordance with the segment accounts was NOK 3.4 (3.8).

"It is pleasing to see that we have increased both revenue and profit in the third quarter. We have had good activity in asphalt operations and high residential production. However, the profits are still marked by weak margins in parts of the operations, and a number of improvement processes have been initiated," says President and CEO Arne Giske.

Veidekke's revenue for the third quarter amounted to NOK 7.9 (7.4) billion. The increase came in construction operations in Sweden and Denmark and in the Swedish property development operations. Profit before tax for the third quarter was NOK 523 (507) million.

The order intake of NOK 9.0 billion in the third quarter resulted in a total order backlog of NOK 31.8 billion.

"We need to concentrate on winning the right jobs. In the third quarter, we have won several major, important contracts, resulting in a further strengthening of the order backlog," says Giske.

Revenue in Veidekke's construction operations totalled NOK 6.1 (5.9) billion, and profit before tax was 185 (213) million in the third quarter. There was increased revenue and profit growth in both the Swedish and Danish operations, while revenue and profit fell in the Norwegian operations. 

"The market situation for building construction operations in southern and western Norway is affecting the results, and much good work is still being done to improve profitability in Civil Engineering. There is high activity in the other parts of the operations in Norway. Operations in Denmark continue to deliver strong results, while Sweden has also improved its profit margin in this quarter as a result of measures in both building construction and civil engineering operations," says Giske.

Revenue from property development operations increased to NOK 684 million from NOK 454 million in the third quarter of last year. Profit before tax amounted to NOK 141 (123) million for the quarter. A total of 187 (317) residential units were sold in the third quarter, including jointly owned projects. The combined sales ratio for residential units under construction was 86%.

"There was high residential production in the quarter, and profits are up compared with last year, but Veidekke sold fewer homes than in the preceding quarters, both because there were fewer units for sale and as a result of the decline in the housing markets in Oslo and Stockholm in particular," Giske explains. 

Industrial operations reported a high level of activity in the third quarter, with revenue of NOK 1.7 (1.4) billion and profit before tax of NOK 218 (183) million.

"Asphalt and Aggregates had high activity and good results, while Road Maintenance is undergoing consolidation and restructuring," says Giske.

Veidekke's total lost-time injury (LTI) rate (the number of lost-time injuries per million hours worked) over the last 12 months was 4.6 at the close of the third quarter. By comparison, the LTI rate was 4.2 at the end of the previous quarter and 3.9 on 30 September 2016. Sickness absence was 3.6% (3.2%).

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.