Veidekke’s combined operations in Sweden (construction and property development) had operating revenues for the third quarter MNOK 728.1

Construction operations

From the GC-Bro project, Smista

In Sweden, Veidekke has established operations in the Stockholm, Gothenburg and Skåne regions.

Swedish construction operations showed a total turnover for the third quarter of NOK 591 million (NOK 601 million). The pre-tax profit was NOK 14.9 million (NOK 7.7 million), and this gave an operating margin of 2.5 per cent (1.3 per cent).

The construction operations are showing a stable and positive development in all regions. The division for heavy construction, which is involved in major infrastructure projects, has been struggling with growth costs for a few years, but is now achieving positive results.

The market for housing and non-residential buildings is showing a clear slow-down as a consequence of the financial unrest and a budding recession. This is made evident by a decline in orders received. On the other hand, the infrastructure market is growing fast. Veidekke has a good position and a strong organisation in this market segment.

At the end of the third quarter, construction operations had orders-on-hand amounting to NOK 2,668 million, as against NOK 2,222 million at the beginning of the year and NOK 2,407 million at the same time last year.

New contracts signed in the third quarter, include a department store for IKEA in Malmö at NOK 30 million, a hotel in Gothenburg at NOK 34 million, a block of flats in Helsingborg at NOK 23 million, and the Viktoria bridge and Viktoria school in Gothenburg at NOK 22 million.

Property development

From Skälderviken, Stockholm

Operations include the development of housing for Veidekke’s own account, and to some extent non-residential buildings for customers in the private and public sectors. In the third quarter, the Property Division achieved a turnover of NOK 206 million (NOK 125 million). This gave a pre-tax profit of NOK 23.5 million (NOK 18.6 million).

The market for housing sales has become gradually weaker in Sweden. Despite the financial unrest, there are still some property buyers provided the type of project is right, but sales are considerably slower. At present, Veidekke’s Swedish Property Division does not have very many projects ready for sale; therefore production would in any case be lower in 2009. In addition, there are now clear signs indicating an improvement in the situation for buyers of development sites. An increasing number of site owners are being forced to sell due to financial problems, and this will most likely make the prices of sites more favourable.

In Sweden, the portfolio of development sites comprised 3,400 dwellings units at the end of the third quarter. Two thirds of these units constitute purchase options, etc. At the end of the quarter, the Swedish Property Division had 580 dwellings under construction, 20 of which remain unsold. No completed dwellings remained unsold.