Lemminkäinen’s muted outlook

Finnish contractor Lemminkäinen issued a cautious forecast for 2012 after reporting 24% year-on-year growth in net sales for 2011 to €2.3 billion.

The contractor said net sales for operations outside Finland grew by 44% year-on-year in 2011 and amounted to €780.3 million, while overall pre-tax profit amounted to €34.6 million - up 7.6% year-on-year.

President and CEO Timo Kohtamäki said, "Despite the rise in the cost of raw materials, infrastructure construction reached a significantly improved result. Business operations in Denmark and Norway, in particular, had a strong year. In residential construction, too, sales were steady all through the year and results were good."

At the end of 2011, Lemminkäinen's order book was up 14% year-on-year to €1.4 billion.

Stable sales forecast

Despite the strong full-year results, Lemminkäinen estimated that in 2012, its net sales would remain on the same level as in 2011, but said its pre-tax profit "will improve". It forecast the total volume of construction in Finland to remain at the level of last year in 2012, adding that the uncertain financial outlook may delay the start of new projects.

The company said regional differences would be more prominent this year, and construction was estimated to be busier in the Helsinki metropolitan area and in growth centres than in other regions of the country. Lemminkäinen forecast the volume of infrastructure construction in Sweden, Norway and Denmark would grow by 3% to 8% in 2012. It added that the need for new residential units in St Petersburg, Russia, was still great.

Mr Kohtamäki said, "The focus of our business activities will move towards the segments with better profitability - for example, to our own residential construction in Finland and St Petersburg. Maintenance and servicing for technical building systems will also be bolstered. In less profitable business areas, we will look for ways to cut costs and improve the efficiency of our operations."