Lemminkäinen profits down in third quarter
By Steve Skinner06 November 2008
Lemminkäinen, the Finnish construction Group, recorded third quarter sales of € 648 million, down -1% on 2007 third quarter revenues of € 655 million. Profits for the quarter of € 53 million were also down by -8% on the € 58 million reported to September last year.
Building construction, both residential and non-residential, was particularly badly hit with a -22% drop in sales from € 268 million in the third quarter of 2007 to € 207 million this year. Despite reduced revenues, the sector recorded profits of € 14,4 million, up +0,6% on the corresponding quarter last year.
Revenues generated through infrastructure construction increased by +12% from € 301 million in the third quarter of 2007 to € 338 million this year. This increase, however, was not reflected in profits, which dropped -26% to € 27 million from € 36 million in the third quarter of 2007.
”The Finnish economy is likely to grow by less than +3% this year and a further slowdown of growth is expected next year,” said Juhani Sormaala, managing director of Lemminkäinen.
”The demand for housing has declined sharply and growth in commercial and office construction has peaked,” said Mr Sormaala. ”Our operations in infrastructure construction and technical building services have reduced the company’s dependence on fluctuations in demand for building construction, and these sectors are expected to remain stable,” continued Mr Sormaala.
Lemminkäinen operations in the Baltic states continue in new road construction and on upgrade projects, but a highly competitive market has significantly weaked the operating conditions in the region according to a company statement.
”Construction activity in Russia remained brisk in the third quarter, although the availability of credit has deteriorated in the quarter, which may reduce the volume of construction in the near future,” said Mr Sormaala.