NCC profits dented by fourth quarter

By Steve Skinner18 February 2009

Olle Ehrlen, CEO of NCC

Olle Ehrlen, CEO of NCC

Sweden's NCC Group recorded sales of SEK 57.4 billion (€ 5 billion) in 2008, down -1,5% on the SEK 58,4 billion (€ 5,2 billion) reported for 2007. Net profit for the year also fell by -19% from SEK 2,2 billion (€ 202 million) in 2007 to SEK 1,8 billion (€ 164 million) in 2008.

Five of the Group's seven business areas recorded increased 2008 sales however, with NCC Construction Denmark and NCC Property Development the only two divisions reporting downturns of -26% and -40% respectively.

Construction sales in Sweden rose by +2,5% from SEK 24,8 billion(€ 2,2 billion) in 2007 to SEK 25,5 billion (€ 2,3 billion) last year. In Finland, construction sales rose from SEK 7,4 billion (€ 669 million) in 2007 to SEK 7,7 billion (€ 701 million) last year, a +4,8% increase.

NCC Construction Norway recorded a +10% increase in sales from SEK 6,3 billion (€ 571 million) in 2007 to SEK 6,9 billion (€ 629 million) last year, while the Group's German division increased sales by +5,5% from SEK 2,3 billion (€ 207 million) in 2007 to SEK 2,4 billion (€ 219 million).

The Group's roads division also increased sales by +14% from SEK 9,8 billion(€ 892 million) in 2007 to SEK 11,3 billion (€ 1 billion) last year.

"The earnings reported for 2008 were among the highest in NCC's history," said Group CEO Olle Ehrlen. "However, 2008 was also the year that the housing market came to a sudden halt. Because of the weakening housing market, fourth quarter profit was charged with impairment losses and restructuring costs totalling SEK 670 million (€ 60 million).

"Our assessment for 2009 is that the housing market will remain weak and that the market for other building construction will slacken. We do, however, expect the civil engineering market to grow as government investments in infrastructure are made in Sweden, Denmark and Norway."
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