NCC first half sales fall
19 August 2011
Nordic Construction Company (NCC) reported first half sales of SEK21.3 billion (€2.3 billion), down from SEK21.6 billion (€2.4 billion) for the first six months of 2010 after weak conditions in the Finnish construction market impacted results.
NCC's net profit for the six months to 30 June was SEK131 million (€14 million), down from SEK319 million (€34.5 million) in the first half of 2010. Profitability was hit by a SEK9 million (€900,000) operating loss from the company's Finland division, together with project impairments and winter expenses.
Orders received were SEK30.4 billion (€3.3 billion), up SEK1.8 billion (€198 million) year-on-year.
President and CEO Peter Wågström said there were many tenders and business opportunities in the market, but added, "The impact of the turbulence in the global economy on demand in the Nordic construction market during the second half of the year is difficult to assess."
Mr Wågström said the market in the Baltic region had had an adverse effect on NCC Construction Finland's earnings since the financial crisis of 2008, and added that the company had discontinued its operation in Lithuania during the first half.
The company's roads division, meanwhile, reported higher demand for aggregates and asphalt. NCC Roads said net sales roles to SEK4.4 billion (€472 million) during the six-month period, compared to SEK4 billion (€439 million) during the first half of 2010. But the unit still reported a net operating loss of SEK117 million (€13 million), albeit less severe than the SEK196 million (€21 million) loss it produced in the same period in 2010.
The first half results came after the Finnish Competition Authority (FCA) took the unusual step of opposing NCC's proposed acquisition of Finnish state-owned contractor Destia's asphalt paving operation at the start of August.
The FCA said the merger would have led to a joint dominant position between NCC Roads and Lemminkäinen Infra, which would have "significantly impeded competition in the asphalt mix market in the capital city area".
