Heijmans ‘in line with expectation’
By Sandy Guthrie03 November 2017
Revenues at Dutch contractor Heijmans for the third quarter are said to be in line with expectations, with its order book at the end of September at a “healthy level”.
When Ruud Majenburg stepped down from the executive board of Heijmans last month, the company said it was ending a period in which a major shift had been made to set a new course.
In February 2017, Heijmans announced that it would focus fully on the Dutch market.
In announcing the third quarter figures, Ton Hillen, chairman of the executive board and CEO said, “We are continuing on the same positive trend which we described during the presentation of the first-half results. Property development and residential building, as well as infra, are all performing in line with expectations.”
He said the recovery in the infrastructure sector was continuing, while the non-residential sector was seeing volumes remain under pressure as a result of challenging market conditions for new-build projects, in combination with its selective acquisition policy.
“Our revenues in the third quarter were in line with expectations and at a level comparable to last year.”
He said the company had taken additional steps in the RIVM/CBG (Dutch National Institute of Public Health & Environmental Protection /Medicines Evaluation Board Agency) and Wilhelmina Lock at Zaandam projects to control and reduce the impact on its operating result further.
On the RIVM/CBG project, Heijmans said it was now in the advanced stages of transferring its share in the consortium to its consortium partner Strukton.
“This is in line with our strategy to reduce the impact of a number of specific projects as quickly as possible in the transition year 2017,” it said. “Although a financial and technical solution was recently realised for the project, Heijmans has decided that the divestment of its share is the best way to implement this strategy.”
It said the consortium had reached financial close and made financial agreements with the Central Government Real Estate Agency (Rijksvastgoedbedrijf). The financial impact of withdrawal from the consortium would be well within the range as published in the 2016 annual report, said Heijmans.
A difference of opinion about the technical implementation and planning of the Wilhelmina Lock project arose in 2014.
After mutual discussions about the design, progress and construction did not produce the desired result, Heijmans and the Province of Noord-Holland decided to submit the situation to the Court of the Arbitration board for the building industry in the Netherlands.
Now, the interim ruling of the arbitration board – the RvA (Raad van Arbitrage voor de Bouw) – found that neither the Province of Noord-Holland nor Heijmans could have foreseen the cause of the problem with the lock’s design.
The Province and Heijmans agreed that this interim ruling offered a basis for the joint completion of the project.
Heijmans said that the provision in its 2016 financial statements seemed adequate, with the exact financial consequences worked out in more detail in the coming period. Both parties said they would continue to make the necessary efforts required to resume construction as quickly as possible.
Speaking about the third quarter figures, Hillen said, “I am satisfied with the fact that we are operating well within the agreed financial framework. We have our sights firmly set on the future and we are on course for a structural recovery of Heijmans.”
The company reported that the infrastructure sector’s recovery was continuing and was well on track. The continued focus on and fine tuning of the tender, project and risk management is helping to make projects more predictable, it said.
Revenues in the third quarter of 2017 were higher than in the same period of 2016. In these revenues, there was a greater focus on regional projects, maintenance and management and specialist projects.
The company gave examples such as the recently-signed alliance contract for the Gorinchem Waardenburg dyke reinforcement project. Heijmans has also announced it has won a contract for a new project for energy-generating sound barriers near the A50 in Uden – Solar Highways.
In Veldhoven, it has started construction on the Zilverbaan, a new western bypass route to the future connection with the A67.