BAM suffers revenue losses in half-year results

Dutch-based company BAM has recorded a fall in its half-year revenues, following €68 million losses surrounding delivery of two major projects in Europe.

Its six-month figure of €3.38 billion is down year-on-year against €3.23 billion for 2013, as it encounters issues within its construction and mechanical and electrical services divisions.

The results, which represent a 6% net loss, were largely attributed to increased complexity of progressing a civil engineering scheme in West Germany. Its budgets had increased after having to tackle adverse ground conditions.

Poor ground and bad weather were also highlighted as core issues behind delays with another of its schemes in the UK.

Despite this, the firm expressed optimism that its fortunes would improve for the second half of 2014. This was based on an increase of 14% in its property revenues to €245 million for the first half of 2014 and what it described as “an encouraging” pipeline of orders.

Nico de Vries, chairman of the executive board of BAM, claimed there had been difficult market conditions that had affected the business.

Consequently, he is stepping down from his post in October to be succeeded by Rob van Wingerden, who has been with the group since 1988 in a number of management positions.

“The results for the first half of 2014 show a mixed performance,” said de Vries. “In our two operational sectors, we continue to work through orders booked under very difficult market conditions - especially in the Netherlands.

“The two Civil engineering projects with major losses which we announced on 7 July are stable. Other projects delivered strong results, supporting the overall sector result for the first half.”

He went on, “In our two investment sectors, the good momentum in the property divestment programme continued, with successful transactions in the Netherlands, Belgium and the UK. In the Dutch residential new home market, the green shoots are translating into encouraging growth in our homes sold, which will over time feed in to our residential construction activities.”

He explained that the company had gained two new significant public private partnership projects that had offered a boost after difficult trading so far this year.

In addition, he said that BAM was continuing with its programme of cost reduction and examination of working capital management in a bid to improve the firm’s operating efficiency.

He added, “I have taken the decision to retire from the executive board with effect from October. This will allow my successor Rob van Wingerden to take complete responsibility for the actions to improve performance and lead the next phase in BAM’s development.”