Lemminkäinen starts turnaround
By Sarah McCay30 July 2014
Lemminkäinen posted increases in its net sales for both the second quarter and the first half of 2014 as the Finnish contractor works hard to turn its fortunes around.
The firm reported net sales of €510 million for the second quarter of 2014, up from €471 million in the same period for 2013. Operating profit for the period was €14.8 million, compared to a loss of €11.9 million in 2013.
First half sales were €789.8 million, up from €736 million for the first half of 2013. Operating profit for the first half of this year showed a loss of €2.5 million, down from €48.8 million in 2013.
However, Lemminkäinen said its order book at the end of June stood at €2.1 billion, up from just under €2 billion at the same time last year.
Lemminkäinen estimates that its 2014 net sales will be slightly lower than in 2013 but its operating profit will improve. In 2013, net sales were €2 billion.
The firm has employed a number of cost-cutting initiatives, including having to reduce its personnel by nearly 500. In June, Lemminkäinen divested its technical building services business to Are Group for a debt free purchase price of €60 million.
Lemminkäinen is now looking ahead with a new strategy and board. Casimir Lindholm took over as president and CEO from August 1, 2014. His appointment also coincides with a new reporting strategy, which will see Lemminkäinen's business reporting segments divided into infrastructure construction; building construction, Finland; and Russian operations.
A new business strategy will see Lemminkäinen focus on providing infrastructure solutions for both the public sector and selected industries in Northern Europe.
Lemminkäinen said it would focus on the growing metropolitan areas of Helsinki and St Petersburg.
The company will also continue to streamline operations, divesting itself of operations no longer linked to its strategy, and releasing working capital where possible.