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Veidekke ASA (OSL:VEI) A solid growth in volume and large margins, particularly in construction operations in Norway, played a key role in delivering good profits for Veidekke of NOK 285 million for the quarter (NOK 242 million in the same period last year). "We are satisfied that we have been able to achieve such good results even though the housing market is slow. The main reason is the diversity of our operations and our strong focus on margins on individual projects," says President and CEO Terje R. Venold.
Veidekke's turnover in the second quarter of the year totalled NOK 5,581 million, which is 16 per cent higher than in the same period last year (NOK 4,792). Operating profit reached NOK 266 million (NOK 212 million) with a pre-tax profit of NOK 285 million. This is 18 per cent higher than for the second quarter in 2007 (NOK 242 million), and corresponds to earnings per share of NOK 1.50 (NOK 1.30).
Veidekke Entreprenør in Norway forges ahead In the second quarter Norwegian construction operations enjoyed an increase in turnover of 32 per cent compared with the previous year, and a profit of altogether NOK 204 million compared with NOK 134 million for the same quarter in 2007. This gives a substantial operating margin of 6.7 per cent as against 5.8 % last year. "A gratifying increase in both volume and earnings! The main reason that construction operations in Norway have succeeded in offsetting the decline in residential building is the growth in activity for commercial buildings as well as for public sector buildings and infrastructure projects," declares President and CEO Terje R. Venold.
For property operations, low sales of housing meant that no new housing projects were started up during the quarter. The division's resources are therefore focused on the value-added development of the portfolio of new sites by means of developing projects that can be offered for sale when the market improves.
For the industry division, asphalt operations are the main contributor and show growth in volume as well as in profitability. Moreover, aggregate operations and recycling also showed an improvement in the quarter.
Veidekke's turnover in Norway in the second quarter reached NOK 4,125 million (NOK 3,260 million), and profits totalled NOK 266 million (NOK 276 million).
Improvement in profits in Sweden Swedish construction operations are also experiencing an upturn, particularly in the Stockholm region. Turnover is stable and margins have improved over several quarters. The downward trend in profits for housing operations can be primarily attributed to fewer projects in the profile for the development site portfolio for start-up in 2008. Turnover in Sweden totalled NOK 822 million (NOK 862 million), and profits finished at NOK 37 million (NOK 22 million).
Consolidation in Denmark Danish operations, Hoffmann A/S, continue to reflect consolidation. The development parallels plans for a break-even result for 2008. Focus will remain on selectivity in the choice of new contracts and strengthening the project organisation. Turnover in Denmark totalled NOK 582 million (NOK 655 million), and the result was NOK -4 million (NOK -45 million).
HSE Sickness absence for all employees in Norway in the second quarter stood at 5.3 per cent (4.8 per cent). In Sweden sickness absence for all employees was 3.2 per cent and in Denmark 2.8 per cent, approximately the same as in the previous year. The absence rate (lost-time injuries per million hours worked) for the entire Group stood at 6.1 (6.4) in the second quarter.
We also refer to the Board of Directors' report for the second quarter, which is enclosed with this press release.
For more information, please contact: Terje R. Venold, President and CEO, Tel. +47 21 05 77 01 / + 47 905 82 323, terje.venold@veidekke.no Arne Giske, Executive Vice President and CFO, Tel. +47. 21 05 77 80 /+47 905 89 526, arne.giske@veidekke.no Kai Krüger Henriksen, Executive Vice President Communication, Tel. +47 21 05 77 04 / +47 90 51 93 60, kai.henriksen@veidekke.no
