Increased activity and good results for Veidekke

Veidekke's sales increased by 9% in the second quarter compared with last year. The order backlog has increased by 14% so far this year. "The highlights of the results are good development in the housing market, margin pressure in construction operations in Norway, margin improvements in Sweden, and a gain on the sale of Veidekke Recycling. All in all, this is Veidekke's best second-quarter results ever," says Terje R. Venold of Veidekke.

Veidekke's turnover in the second quarter was 4 634 MNOK (4 327 MNOK in 2010). Profit before tax was 390 MNOK (163 MNOK). Earnings per share for the quarter were NOK 2.40 (NOK 0.90). The order backlog for the Group's construction operations is now at NOK 13.9 billion (12.3 billion NOK) (Figures are taken from the segment accounts).

Construction operations
The positive developments in the Scandinavian construction market continued in the second quarter enabling Veidekke to increase its order backlog by 8% during the quarter. The Norwegian operations continue to be impacted by margin pressure as well as the impairment of a major project. In Sweden, turnover rose by 30% and earnings improved by 3.2%. Sales for overall construction operations were 3,672 MNOK (3,294 MNOK) in the second quarter with earnings of 73 MNOK (110 MNOK).

Property development
In the housing market, the positive trend from 2010 continued, especially in the major cities. For Veidekke, this resulted in a marked increase in activity and profits. In addition, Veidekke benefited from a positive earnings effect of 133 MNOK from the acquisition of Bouwfonds (NL) shares in Bouwfonds Veidekke AB. The number of homes under production at the end of the quarter was
1 158 (614), and in all, Veidekke Property sold 178 housing units during the second quarter (159). Revenues for Veidekke Property totalled 377 MNOK (306 MNOK) in the second quarter and profit was 177 MNOK (13 MNOK).

Industry
The total turnover for Veidekke Industry in the second quarter was 827 MNOK (849 MNOK) with earnings of 161 MNOK (48 MNOK). The sale of Veidekke Recycling was completed in June, generating a positive earnings effect 109 MNOK. For asphalt operations, turnover and earnings were down slightly, but the decrease was offset by operations in crushed stone and gravel, and road maintenance.

HSE
Sick leave for all employees in Norway in the second quarter was 5.7% (5.5%), while in Sweden it was 3.6% (3.1%) and in Denmark 2.1% (2.5%). The injury rate for the entire group (number of lost-time injuries per million hours worked) was 5.7 (5.4) in the second quarter.

See also the Board's report for the second quarter of 2011, attached to this press release.

Report Q2 2011

For more information:

President & CEO Terje R. Venold

phone + 47 21 05 77 01 / +47 90 58 23 23, terje.venold@veidekke.no

Executive Vice President /CFO Jørgen W. Porsmyr

phone+ 47 21 05 76 44 / +47 90 75 90 58, jorgen.wiese-porsmyr@veidekke.no

Executive Vice President Communication Kai Krüger Henriksen

phone + 47 21 05 77 04 / +47 90 51 93 60, kai.henriksen@veidekke.no

Veidekke is one of Scandinavia's largest contractors with 6,000 employees and a turnover of 16.3 billion NOK (2010) Activities include building and construction projects, residential developments, asphalt plants, gravel and aggregates, road maintenance and recycling. Our values are professional, honest, enthusiastic and pioneering. Our goals for health, safety and the environment, HSE, have equal status with our financial goals.  Veidekke is characterized by a decentralized organizational model with a strong corporate culture and a high degree of employee involvement. Over half the employees are co-owners, holding 20% of Veidekke's shares between them. The company is listed on the Oslo Stock Exchange and has never declared a loss since it was founded in 1936.