Veidekke maintained good margins in the third quarter

Thursday, 05. November 2009 08:01
The third quarter of 2009 ended with a turnover of BNOK 4 and a
profit of MNOK 241 for the Veidekke Group. The economic downturn has
resulted in a reduction in turnover compared with the same period
last year, but there are now more and more bright spots on the
- We increased our profit margin, the order backlog is still growing
and housing sales picked up in the third quarter, says President and
CEO, Terje R. Venold.

Veidekke achieved a turnover for the third quarter of MNOK 3,980
(MNOK 5,029). The consolidated operating profit amounted to MNOK 224
(MNOK 335) and the profit margin was 6.0 (5.2), while earnings before
tax totalled MNOK 241 (MNOK 263), giving earnings per share of NOK
1.30 (NOK 1.60). The orders-on-hand for the Group's construction
operations amounted to BNOK 11.3 (BNOK 11.2).

- All in all, the third quarter was positive for Veidekke's
operations seen as a whole, although we experienced a decline in
turnover as a result of the ongoing recession. However, our
construction operations are still achieving strong margins, and the
increasing order backlog reflects yet another quarter of growth,
which is of great importance for keeping up our momentum as we head
into 2010. In addition, housing sales are also showing continued
improvement with 100 dwellings sold in Norway and Sweden this
quarter, as against 19 in the same quarter last year, adds Mr Venold.

Construction operations
The Norwegian construction operations are still the main driver in
this area. Despite the recession and a continued reduction in
turnover, the operations are generally achieving excellent
profitability. Good operational management and profit margins are
being upheld in the Stockholm region both for building and
construction, while the results for the other Swedish regions reflect
a low level of incoming orders in the preceding quarters. Our Danish
operations, Hoffmann, has managed to maintain the same level of
earnings and profit as in the second quarter, even though the market
is still weak.

The total turnover for construction operations amounted to MNOK 2,840
(MNOK 3,621), giving a profit of MNOK 141 (MNOK 184).

Property development
A low level of housing production is leading to weak results, while
the sale of housing is once again improving in the Oslo and Stockholm
regions, both for completed dwellings and new projects. During the
third quarter, Veidekke sold 48 housing units in Norway, as against
41 in the whole of 2008. The corresponding numbers for Sweden are 52
sold dwellings, compared with 86 in all of 2008.

The turnover for Veidekke's property operations ended up at MNOK 105
(MNOK 361), and the result was MNOK -12 (MNOK -53).

There was significant activity in the industry operations throughout
the third quarter, with a high level of production and relatively
good profitability within asphalt, crushed stone and gravel, whereas
there was a slight decline in recycling. Allocations for future
losses within road maintenance amounting to MNOK 34 lead to a profit
reduction in comparison with 2008.

The total turnover for Veidekke Industri (industry) was MNOK 1,062
(MNOK 1,204), and the profit amounted to MNOK 115 (MNOK 147). The
reason for the decrease in turnover is that the demolition/plant
contracting operations have been transferred to Veidekke Entreprenør

Sickness absence for all employees in Norway was 5.8 per cent (5.5
per cent). For all employees in Sweden, sickness absence was 3.0 per
cent (3.0 per cent), and the equivalent numbers for Denmark were 2.2
per cent (2.5 per cent). The injury rate (lost-time injuries per
million hours worked) for the whole Group ended up at 4.9 (5.7) for
the third quarter.

We also refer to the Board of Directors' report for the third quarter
of 2009, which is enclosed with this press release.

For further information, please contact:
Terje R. Venold, President and CEO, Tel. 21 05 77 01 / 90 58 23 23,
Jørgen W. Porsmyr, Executive Vice President/CFO, Tel. 21 05 76 44 /
90 75 90 58,
Kai Krüger Henriksen, Executive Vice President Communication, Tel. 21
05 77 04 / 90 51 93 60,


Veidekke ASA is a leading Scandinavian building contractor and
property developer with 6,250 employees and an annual turnover of
BNOK 19.4 (2008). Veidekke is listed on the Oslo Stock Exchange. It
has a wide group of shareholders and 18 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.

This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.

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