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Veidekke ASA (OSL:VEI) Veidekke's total financial result for the third quarter was NOK 263 million, a somewhat weaker result than for the same quarter last year, due to a devaluation of the shares in Hansa Property Group ASA. - The consolidated operating result is up 8 per cent, totalling NOK 335 million, a result I am very pleased with, says President and CEO of Veidekke ASA, Terje R. Venold. In his opinion, focusing on good operational management is the key to meeting the challenges of the coming decline in the building and construction market.
Veidekke achieved a turnover for third quarter 2008 of NOK 5,029 million (NOK 4,850 million). The consolidated operating profit totalled NOK 355 million (NOK 311 million), giving a pre-tax profit of NOK 263 million (NOK 327 million). Earnings per share was NOK 1.60 (NOK 1.80). The orders-on-hand for the Group's construction operations amounted to NOK 11.2 billion (NOK 14.1 billion).
- There is no doubt that the current financial unrest and uncertainty concerning the further development, is now being reflected in our order situation. We come from a high level, and it has rarely been more difficult to foresee the future. - However, we are well prepared, says Mr. Venold, referring to the sound financial position and strong organisation of the Group.
Thumbs up in Norway In the third quarter, Norwegian construction operations continue to show significant improvement in the form of increased turnover and profits. The turnover reached NOK 2,530 million (NOK 2,382 million), resulting in a profit of NOK 169 million (NOK 135 million). This gives a healthy profit margin of 6.7 per cent (5.7 per cent). The decline in house building activities has to a great extent been offset by increasing activity in private and public non-residential buildings, and a strengthening of the heavy construction sector.
Property development operations have reflected extremely low housing sales, and the division's resources are now directed towards the active value-added development and improvement of the portfolio of development sites, so that the projects are ready to be realised as soon as the market recovers. Due to the current financial unrest, Veidekke has chosen to devaluate its 8.7 per cent shareholding in the unlisted property company Hansa Property Group ASA by NOK 69 million in the third quarter.
The Industry Division increased its quarterly turnover by 22 per cent compared with the previous year, and achieved a result of NOK 147 million (NOK 130 million). This can mainly be attributed to asphalt operations, but the other business areas are also enjoying a boost in demand and a generally high level of activity.
In Norway, Veidekke's turnover for the third quarter totalled NOK 3,739 million (NOK 3,581 million), giving a profit of NOK 249 million (NOK 324 million).
Improvement in Sweden The Swedish construction operations are showing a positive development, with particularly good results within building operations in Stockholm, and a boost in construction operations. Within property development, sales of housing have fallen significantly, thus reducing the number of new projects being started up. The turnover in Sweden was NOK 728 million (NOK 618 million). This gave a profit of NOK 38 million (NOK 26 million).
No change in Denmark Our Danish operations, Hoffmann A/S, are still affected by capacity adjustments through staff cut-backs, and subsequently lower turnover rates. The market for development and sale of property and housing has come to a stand-still. The turnover in Denmark was NOK 505 million (NOK 634 million), giving a result of NOK -8.6 million (NOK -12.7 million).
HSE Sickness absence for all employees in Norway was 5.5 per cent (4.9 per cent). Sickness absence for all employees was 3.0 per cent in Sweden and 2.5 per cent in Denmark, both approximately the same as the year before. The injury rate (lost-time injuries per million hours worked) for the whole Group ended up at 5.7 (6.4).
We also refer to the Board of Directors' Report for the third quarter, which is enclosed with this press release.
For further 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 / +47 905 19 360, kai.henriksen@veidekke.no
Veidekke ASA is a leading Scandinavian building contractor and property developer with 6,500 employees and an annual turnover of NOK 19.3 billion (2007). Veidekke is listed on the Oslo Stock Exchange. It has a wide group of shareholders and 16 per cent of the shares are held by the company's employees. The company's activities cover a large range of building and construction contracts, development of housing and commercial projects for private and public customers, asphalt operations and road maintenance, and collection and recycling of waste.
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