Veidekke: Q1 2023 results

Veidekke achieved revenues of NOK 9.5 billion in Q1. A dispute with the Norwegian Public Roads Administration was settled with a negative impact on earnings. The underlying loss was NOK -37 million before tax. The group’s order book totalled NOK 43.1 billion at quarter-end. The loss per share was NOK -0.9.

“The underlying performance of the group’s operations is strong, in a first quarter that displayed the customary seasonal downturn,” says Group CEO Jimmy Bengtsson.

“We have reached an agreement with the National Public Roads Administration in the dispute over E39 Svegatjørn–Rådal, a project started in 2015. This dispute has been with us over many years and has required considerable time and resources both from us and the client. Although the outcome of the negotiations was not what we had originally envisioned, we look forward to putting this matter behind us,” says Bengtsson.

“We are very pleased that our order intake has remained so robust despite difficult market conditions, and that we have been able to boost revenues by 13% compared to the same quarter last year,” says Bengtsson.

“Although the market is more challenging now, with longer lead times and some project deferments, Veidekke has strengthened its order book thanks to the strong overall inflow of new projects at the start of 2023,” says Jimmy Bengtsson.

“However, there are substantial variations between our different geographical regions and market segments. In Sweden, a generally weak residential market is currently the greatest challenge, while in other regions the primary difficulty is uncertainty about next year’s activity levels,” says Bengtsson.

The group’s quarterly order intake was NOK 10.3 billion, compared to NOK 10.4 billion in Q1 2022. Around two-thirds of the order book will be converted into revenue in the next 12 months. At quarter-end, the order book amounted to NOK 43.1 billion, up 4% since the beginning of the year and up 9% compared to the same period last year. Measured against local currencies, the order book was on a par with year-end 2022.

Veidekke achieved revenues of NOK 9.5 billion in Q1 2023, compared to NOK 8.4 billion in the first quarter of 2022. The construction operations in Norway and Denmark and Infrastructure Sweden improved their revenues. Construction Sweden’s revenue performance was on a par with last year, while Infrastructure Norway’s revenues fell by 18%.

In 2015, Veidekke and the Norwegian Public Roads Administration entered into an agreement on construction of the project E39 Svegatjørn–Rådal outside Bergen. The project resulted in several disputes, the final settlement included. The main legal hearing regarding the disputed final settlement was scheduled for September 2023. The parties have agreed to a negotiated settlement, and the case is now closed. The settlement resulted in a loss of NOK -110 million for Veidekke in Q1, and capital influx of NOK 300 million which will be recorded in Q2 and Q3.

The loss for the quarter totalled NOK -147 million. With the settlement of the dispute taken into account, the underlying loss was NOK -37 million, compared to a loss of NOK -55 million in Q1 2022, where the Q1 2022 result included extraordinary finance costs totalling NOK 33 million. As usual, the group’s first-quarter performance was impacted by seasonal downturns in the asphalt and aggregates operations, as well as some civil engineering segments. Increased activity boosted the profits of Construction Norway and the Danish operation, while cost increases for the asphalt operation and further losses made by the construction operation in Stockholm had a negative impact. Taking the settlement of the E39 dispute into account, the overall profit margin was -0.4%, compared to -0.7% in the first quarter of 2022.

Net interest-bearing assets totalled NOK 2.5 billion at the end of Q1 2023, compared to NOK 3.3 billion at the beginning of the year. Cash flow from operational activities amounted to NOK 320 million in Q1, up from NOK 1 million in Q1 2022. Cash flow from investment activities amounted to NOK -786 million, compared to NOK -128 million in the first quarter of last year. The change from 2022 is linked to a payout under an earnout agreement relating to Construction Sweden. The statement of financial position totalled NOK 17.6 billion at quarter-end, on a par with year-end 2022, and up from NOK 16.5 billion in the corresponding quarter of last year.

The first-quarter LTI (lost time injury) rate was 3.9, compared to 2.9 in the preceding quarter and 5.4 in Q1 2022. One serious injury occurred during the quarter. The sick leave rate was 6.2%, compared to 6.4% in the preceding quarter and 4.7% in the first quarter of last year.

This information is subject to a disclosure duty pursuant to section 5-12 of the Securities Trading Act.

For more information, contact:
Jimmy Bengtsson, CEO, +47 984 70 000 
Lars Erik Lund, EVP, +47 413 31 369 
Jørgen Wiese Porsmyr, CFO,+47 907 59 058 

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Veidekke is one of Scandinavia's largest contractors. In addition to undertaking all types of building and civil engineering assignments, the group also maintains roads and produces asphalt and aggregates. Veidekke emphasises stakeholder involvement and local experience. Its annual turnover is approximately NOK 39 billion, and half of its 8,000 employees own shares in the company. Veidekke is listed on the Oslo Stock Exchange, and has posted a profit every year since its inception in 1936.

Title File type
Report Q1 2023 pdf
Presentation Q1 2023 pdf
Historical financial information per Q1 2023 xlsx