Veidekke showed a turnover for the second quarter of 2009 of MNOK 4,186 (MNOK 5,581 for the second quarter of 2008), and earnings before tax were MNOK 204.5 (MNOK 284.7). This gives earnings per share of NOK 1.2 (NOK 1.5). The consolidated operating profit for the second quarter was MNOK 180.1
(MNOK 266.4). Net financial items were MNOK 23.1 (MNOK -9.5).

At the end of the quarter, orders-on-hand for construction operations totalled
BNOK 10.8, as against BNOK 10.6 at the end of 2008, and BNOK 12.6 at the same time last year.

The Group maintains a strong financial position.

The Veidekke Group during first half of 2009

All in all, the second quarter confirmed the negative impact of the market decline and financial crisis on the business. The most pronounced effect is considerably lower volumes for the construction entities, but Veidekke has still managed to maintain good profit margins. This situation is most evident in the Norwegian operations, which have been characterised by good operational management and consistently high project profitability. In Sweden, regional differences are far greater. Here, the weakest market is in the Gothenburg area, whereas operations in the Stockholm region continue to show a positive development obtained through a stronger customer orientation and innovative thinking in the area of contracts and cooperation. Denmark is also showing a positive margin development, mainly due to internal improvement processes and capacity adjustments related to continued low volumes. Construction operations show progress in all three countries, where especially infrastructure projects provide a number of opportunities.

Throughout spring, housing sales have picked up considerably, particularly in Oslo and Stockholm. However, volumes and earnings are still low, as hardly any new projects have been initiated during the last year. However, the increased demand will make it possible to launch new housing projects in the course of the autumn. The low interest rate level has without doubt stimulated demand, and most of our completed dwellings are now sold. An exception is the Trondheim area, where the market is still weak.

The second quarter figures for the industry operations show a clear improvement following a weak first quarter. This applies particularly to asphalt operations, for which volumes and result were slightly better than for the same period last year.

The area of crushed stone and gravel also achieved a volume and result on par with the previous year. Recycling operations are somewhat weaker, whereas prices and margins within operations and maintenance have shown a positive development, albeit from a low level.

The Group has a strong financial position with a net interest-bearing position of MNOK -162 (MNOK -260 at 31 December 2008).

Construction operations

In Norway and Denmark, the entities are engaged in nation-wide building and construction operations, while operations in Sweden are concentrated in the regions around Stockholm and Gothenburg and in Skåne.

Construction operations had a total turnover of MNOK 3,088 for the second quarter (MNOK 4,377), and earnings before tax amounted to MNOK 139.8 (MNOK 218.2). The profit margin was 4.5 per cent (5.0 per cent).

Property development

The Property Division is engaged in the development of dwellings for Veidekke’s own account, as well as non-residential buildings for private and public customers. The operations are concentrated around the largest towns in Norway and Sweden, while in Denmark, activities are limited.

In the second quarter, property operations in Scandinavia had a turnover of MNOK 236 (MNOK 387 in the second quarter of 2008). Earnings before tax were MNOK 2.5, as against MNOK 13.9 in the same quarter of 2008.

Since autumn 2007, the demand for new dwellings has been extremely low. However, during the last few months, the market has shown a gradual improvement, and the sale of completed dwellings has picked up, especially in the areas around Oslo and Stockholm. This has given cause for cautious optimism, and towards the end quarter, we started sales on three projects in Norway and two projects in Sweden, drawing a relatively high level of interest.

Due to the market development, very few new projects have been started up during the last two years, and as a consequence, the number of dwellings under construction has been significantly reduced. All in all, Veidekke’s property operations had 356 dwellings under construction in 13 projects at the end of the quarter. The equivalent numbers for the second quarter of 2008 were 1,014 dwellings under construction in 23 projects.

At the end of the quarter, the Group had a site portfolio corresponding to 7,800 housing units. Around 50 per cent of the sites will be ready for construction in the course of 2009 and 2010, and the work of preparing the sites is given high priority.

Industry operations

The Norwegian Industry Division’s operations are nation-wide and its business areas are asphalt, crushed stone and gravel, road maintenance and recycling of industrial waste. In Sweden, Veidekke has operations within the areas of asphalt, crushed stone and gravel, but at present, these activities are very limited.