“Veidekke has maintained stable profitability despite increasingly challenging market conditions, and has improved both revenues and profits in the third quarter,” says Group CEO Jimmy Bengtsson.
“Rising interest rates and ongoing high material costs are increasing hesitancy among clients and delaying project starts. Although we have a good overview of activity in the next 12 months, we expect to feel the impact of market conditions on revenue towards the end of 2024. However, we also see opportunities in a weaker market, and are prepared to exploit these,” says Jimmy Bengtsson.
“Despite the challenging market conditions, Veidekke is maintaining a strong order book of high-quality projects. The third-quarter order intake primarily came from the private sector, and can be attributed to strong, long-term customer relationships developed by profitable group entities,” says Bengtsson.
“Market conditions vary significantly between our different operational regions and segments. The market downturn has long been apparent in the Swedish residential segment, and we will therefore be implementing an extensive reorganisation in Sweden in Q4 which will reduce the workforce by 60 persons,” says Bengtsson.
Veidekke achieved revenues of NOK 10.4 billion in Q3 2023, up 9% from NOK 9.6 billion in the third quarter of 2022. The increase is attributable to Construction Norway, Construction Sweden and Infrastructure Sweden.
Higher activity levels improved the group’s nominal result, with the quarterly profit before tax totalling NOK 601 million, compared to NOK 545 million in the third quarter of last year. Overall, the profit margin was 5.8%, compared to 5.7% in Q3 2022.
The group’s quarterly order intake was NOK 5.0 billion, compared to NOK 7.6 billion in Q3 2022. At quarter-end, the order book amounted to NOK 40.7 billion, down 2% since the start of the year and down 7% on the same quarter last year. Approximately 66% of the order book will be converted into revenue in the next 12 months.
Net interest-bearing assets totalled NOK 1.4 billion at the end of Q3 2023, compared to NOK 2.3 billion last year. Cash flow from operational activities in the first three quarters of the year amounts to NOK 1.1 billion, up from NOK 502 million in the same period in 2022. Cash flow from investment activity amounted to NOK -998 million, compared to NOK -399 million last year. The statement of financial position totalled NOK 18.3 billion at quarter-end, compared to NOK 17.6 billion at the beginning of the year and NOK 17.9 billion one year ago.
The third-quarter LTI (lost time injury) rate was 1.7, compared to 3.7 in the preceding quarter and 2.4 in Q3 2022. One serious injury occurred during the third quarter. The quarterly sick leave rate was 5.0%, compared to 4.2% in the preceding quarter and 4.6% in the third 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
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.
|Report Q3 2023|
|Presentation Q3 2023|
|Historical financial information per Q3 2023||xlsx|