Hard winter for Destia
By Sandy Guthrie12 August 2015
Finnish group Destia has seen its revenue increase by 5.8% in the first half of 2015, but while it is forecasting that its full-year revenue will grow slightly, it is warning that its operating profit for the year will fall “significantly” short of last year’s figure.
The infrastructure and construction service company’s first half revenue increased to €179.6 million from €169.7 million last year.
It said its order book had developed positively in the first half of the year and stood at €821.4 million, compared to €717.6 million in the first half of 2014 – growth of 14.5%.
President and CEO Hannu Leinonen said, “Destia’s first half-year went moderately well in a challenging market situation. While overall demand was at a relatively stable level, competition for projects continued to be fierce.
“Our revenue and order book increased during the reporting period. Our order book is clearly on a better level compared to the corresponding time of the previous year. During the reporting period, we concluded significant new contracts, both in our core businesses and in our focus areas of strategic growth.”
He said the weakening of the company’s profitability during the period was disappointing.
“The result for the corresponding period last year was improved by individual ongoing projects that were particularly successful,” he said. “This spring, on the other hand, the result was encumbered by challenging weather conditions in winter in certain parts of Finland and by two large on-going failed projects. We are paying particular attention to risk management and profitability in projects from the tendering stage on in order to improve profitability.”
Destia said the operating environment for the infrastructure field and the whole construction sector remained challenging, as uncertainty in the economy continued. It predicted that the infrastructure market would contract by 1% this year, and that growth would not be evident until next year.
It added that competition remained fierce, and while demand was stable, projects being tendered for were smaller in size than before.