A trading update from Dutch contractor Heijmans said its revenues were +9% higher for the first nine months of the year than the same period in 2014. It added that its order book stood at € 2.1 billion at the end of September.
The growth in revenues came from Heijmans’ Property Development and Residential Building businesses, which were said to have seen a strong rise in turnover and higher profits in the third quarter of the year compared to the same period last year. In contrast, the infrastructure business was said to be seeing lower turnover and profits under pressure.
Executive Board chairman Bert van der Els said, "Our general picture as highlighted in the first half year results did not change in the third quarter. A nice plus for Residential thanks to the ongoing recovery in the housing market and a poor minus for Dutch Infra. Germany is performing well.
“The results at our Dutch Infra business remain below par as a result of losses on projects acquired in previous years. On a number of these projects, this is related to discussions regarding who should bear the risks and the already incurred and expected additional costs. Managing risks on major projects is our top priority. We do expect to realise an improvement in our operating result but cannot provide a more specific forecast at this point."
As far as the Property Development and Residential Building businesses were concerned, the company sold 1,399 homes in the first ten months of the year compared with 742 in the same period in 2014.
Heijmans also said there was a growing demand for affordable homes with short lead times. This trend has seen it launch Heijmans ONE, a concept for temporary and moveable housing for single home households. The company is due to start production of the first 30 units for the 'Wonen Limburg' housing corporation soon.
The company also saw slightly increased revenues at its non-residential building business in the third quarter, although it said margins remained under pressure. Meanwhile, revenues were down at Heijmans’ infrastructure business and profits were “below par” due to losses on five to ten major projects representing revenues of some € 90 million.
In terms of its strategy, Heijmans said, “We aim to exclusively bid for projects with healthy margins and acceptable risks.”
It added, “The general picture as outlined above is expected to remain largely unchanged for the remainder of the year. Property Development and Residential Building are showing strong progress and will have a positive impact on turnover and results, which also applies to Germany. However, our Dutch Infra activities will exert strong negative pressure on results, while planned improvements at Non-Residential are not yet having sufficient financial impact.
“Given the uncertainties relating to ongoing discussions with clients on a number of projects, we expect to realise an improvement in our operating result, but cannot at this time provide a more specific forecast.”