Veidekke narrows first quarter loss

Scandinavian contractor Veidekke reported a first quarter loss of NOK52 million (€6.8 million) on revenues of NOK4.3 billion (€566 million), narrower than the NOK69 million (€9.1 million) loss it reported in the same period in 2011, on revenues of NOK3.5 billion (€460 million).

CEO Terje Venold noted that the first quarter was traditionally an expense quarter for a business like Veidekke, not least because its asphalt operations have little or no activity in the winter.

"Performance has improved somewhat year-on-year. We see strong growth in Veidekke's revenues and backlog of orders, but the margins on construction operations in Norway continue to lag behind slightly," Mr Venold said.

Total construction sales Norway, Denmark and Sweden climbed 24% year-on-year to NOK3.8 billion (€500 million), with Norway alone achieving an increase of 35% compared with last year. The company attributed the growth in revenues to more construction projects for private customers in its Norwegian operation.

Veidekke said that while total earnings in the segment increased slightly to NOK65 million (€8.5 million), the profit margin of 1.7% was reduced by weak results on some projects in their final phase.

At the end of the first quarter, Veidekke's construction backlog stood at NOK14.7 billion (€1.9 billion), up from NOK12.9 billion (€1.7 billion) at the same point in 2011.