Dutch contractor Heijmans is reporting a positive start to the year, with revenue for the first quarter higher than last year, and CEO Ton Hillen claiming that the company was continuing its recovery in the first three months of 2018.
He said, “The adjustments we have made over the past year are now paying off. While in recent years we repeatedly reported mediocre first-quarter results, this year we recorded a positive underlying result.
“We saw an increase in our order book and the latest intake all meets our tightened risk criteria. It remains crucial to maintain our increased focus on order intake if we are to achieve structural profitability.”
He said that thanks to a substantial recovery in profitability, together with the accompanying significant reduction in its debt, the company had been able to amend the financing agreements with its consortium of banks, and extend its credit facility to 1 July, 2022.
“The renewed agreements are a clear demonstration that our banking syndicate has faith in the current course of the company. The terms of the facility have improved, which allows us to set our sights further into the future and to focus on doing business,” he said.
Building & Technology
In its Building & Technology division, Heijmans combined its non-residential and residential building business areas under a single centralised management from the start of the year.
It said the continued merging would be affected in the course of this year.
The company said this would enable it to streamline know-how and business processes further, so it could respond more effectively to market developments, while retaining specific competencies.
By forming the Building & Technology business area, and more specifically the multi-functional high-rise residential buildings segment, Heijmans said it was responding to the demand for large-scale, inner-city, multi-functional new-build projects. This category includes the ongoing transformation of the former industrial site of Fenixloodsen in Rotterdam, with a mix of apartments, commercial spaces and cultural facilities.
Following a period of decline in the activity level of the non-residential new-build projects business area, Heijmans is now seeing an increase in the number of new projects with sufficient revenue potential to justify their risk profile, it said.
One example of this is Heijmans’ involvement in the project for the new-build construction of the European Medicines Agency (EMA) headquarters in Amsterdam, with a participation of 50%.
It said another example was the renovation and extension of the electrical and mechanical systems at the Paleis Het Loo museum in Apeldoorn.
Heijmans said that through the development of innovative concepts, it wanted to offer its clients added value, and by doing so differentiate itself in the non-residential building market. The BeSense innovation, which it said responded to the need for smart, data-driven building management on the basis of sensor technology, has already led to the installation of approximately 3,000 sensors at various clients.
Heijmans said its residential building activities performed in line with expectations, with new contracts such as the one for 39 care homes in Huizen, and 19 owner-occupier homes and 33 rental homes in Zeewolde, plus solid progress in the realisation of ongoing projects such as De Schoone Ley on the HAGA site in The Hague, 98 homes in Zevenhuizen, and 67 homes in Pijnacker.
As part of the current effort to increase the sustainability of the existing housing stock in the Netherlands, Heijmans said it was able to make its renovation expertise available to an increasing number of housing corporations, which was increasing the share of renovation in its residential building activities.
Heijmans infrastructure division showed more promise in the first quarter of this year than in the first quarter of last year, it said.
Based on a tightened focus on core competencies, better risk management and sound management, the division is managing to seize opportunities in the market and win contracts for various new projects, it said. On top of this, Heijmans is looking to achieve a better balance between large projects on the one hand and regional projects, asset management contracts and specialist activities on the other.
The company recently received the provisional permit for the widening of the A1 Apeldoorn-Azelo motorway between Twello and Deventer, and between Deventer-Oost and Rijssen. Heijmans also recently won the contract for the N280 Roermond project. This contract includes the deepening of the road, plus the construction of a parallel structure and two overfly junctions.
On the basis of the progress Heijmans has booked in the recovery of profitability and the reductions of its debt, it brought forward talks with its banking syndicate on the renewal of its current financing terms, which were agreed in February 2017.
Heijmans has since reached full agreement with the banking syndicate, consisting of ABN Amro, ING, KBC and Rabobank, on the amended terms.
The original agreement that was set to end in mid-2019 has been extended for a period of four years, from now to 1 July, 2022, effective as of 16 May, 2018.
At Heijmans’ request, the total commitment of the facility has been reduced with immediate effect by €12 million to €144 million, and will be gradually reduced to €121 million in the period to 30 June, 2019.