The MT Højgaard Group continued to win new orders and expand the order portfolio during the second quarter. Revenue and results were affected by postponed start-up of projects.
In the second quarter, the MT Højgaard Group entered into contracts worth DKK 2.5 billion and total order intake for the first half was DKK 4.3 billion compared with DKK 3.4 billion in the first half of last year. The Group’s order book thus increased to DKK 8.7 billion, which is just over DKK 2 billion more than at the same time last year and DKK 1.2 billion more than at the turn of the year.
The order book is characterised by projects with sound risk profiles in line with the Group’s strategic focus on profitable growth. At 30 June 2016, orders won but not yet contracted amounted to DKK 1.9 billion.
- The order intake is healthy and stable, underlining our competitiveness. We win an increasingly large proportion of the tenders in which we participate and there is also growing demand from private and public customers for our model of early involvement and long-term open collaboration before contracts are signed. This form of collaboration gives customers the best opportunity to take advantage of our entire skills platform and digital tools, says the Group’s President and CEO, Torben Biilmann.
Revenue and earnings lower than expected
Revenue for the second quarter amounted to DKK 1.6 billion and DKK 3.1 billion for the first half year. This is a decline of DKK 0.2 billion for the half year compared with the same period last year. The decline is mainly due to lower revenue from Greenland Contractors but even when adjusted for this, revenue is still somewhat lower than expected because of postponed start-up of major projects and write-down on an infrastructure project. The operating result for the quarter is a loss of DKK 5 million, giving a total loss of DKK 19 million for the first half compared with a profit of DKK 122 million in the first half of last year.
- A number of strategic measures, such as building up long-term customer relations and investment in VDC (Virtual Design and Construction) have enabled us to create a good platform for enhancing productivity and achieving profitable growth. Some of the projects in our order portfolio extend over several years, and when we get started on the postponed projects it will have a positive effect on both revenue and results, says Torben Biilmann.
Outlook for 2016 lowered
Based on the order book at the end of the period and planned handovers in the fourth quarter of construction projects developed in-house, revenue for the second half of 2016 is expected to be significantly higher than in the first half. However, as a result of the reduced revenue in the first half, management has lowered its expectations for full-year revenue to around DKK 6.8 billion compared with the previous figure of DKK 7.0 billion. The forecast for the operating result before special items has also been reduced, to around DKK 225 million, compared with the previous figure of around DKK 300 million, as a result of the lower revenue and the aforementioned write-down. This is still an improvement on 2015 when the significant contribution from Greenland Contractors in Thule is taken into account.
By their nature, projections of future financial performance involve risks and uncertainties that may cause actual performance to differ materially from that contained in the forward-looking statements.
The half-year report can be found here.