Heijmans turns round loss
By Sandy Guthrie24 August 2010
Dutch construction company Heijmans has reported a net profit of € 4 million for the first half of this year, following a loss of € 43 million in the first half of 2009.
The company said that there was an improvement in operating profit, primarily in the Netherlands, to € 14 million. It added, though, that there was still no sign of sustainable recovery in the housing market, with low consumer confidence.
Gerrit Witzel, chairman of the Heijmans Executive Board, said, "Our results in the first half of 2010 demonstrate a clear improvement. Even though the residential market shows some weak signs of modest recovery, the market conditions remain very difficult."
He said the company's strategy remained focused on the Netherlands. "We keep our focus on sustainable improvement of our products and processes. We will thereby enhance the quality for our clients, the costs will be reduced and the profitability increased.
"Barring unforeseen circumstances, Heijmans expects 2010 to end up profitably."
Heijmans said that there was still no sign of sustainable recovery in the housing market for owner-occupied properties. Revenues from residential building decreased by -25% because of a selective contracting policy and the continuing difficult market conditions. However, it said that an improved operating result for residential building of € 10 million - compared to € 6 million in the first half of 2009 - was mainly through better project management, realisation of cost reductions, and the optimal use of procurement benefits.
In the non-residential building sector, the market is under pressure and Heijmans reported relatively few new projects, from both public and private sectors.
The earthworks, roads and hydraulic engineering sector in the Netherlands has remained relatively robust despite the adverse economic developments, according to Heijmans. It said the Dutch government had contracted additional infrastructure works - so-called emergency packages - in the first half year. Heijmans acquired three of the six emergency packages.
Among Heijmans' foreign activities, there was a fall in revenue of 15% in Belgium, while the order book in the UK increased to € 399 million thanks to the acquisition of several major social housing projects from the government shortly before the General Election. It is expected that the order book will decline in the next half year.
The combined revenue of the German subsidiaries Oevermann and Franki, adjusted for Heitkamp Rail that was sold at the end of 2009, decreased by -26%. Oevermann's non-residential activities in particular produced lower revenues. It said the focus here was on margin rather than volume, and that partly as a result of this, the operating result decreased to € 2 million. The order book was higher than at the 2009 year end.