Veidekke showed a turnover for the third quarter of 2009 of MNOK 3,980 (MNOK 5,029 for the third quarter of 2008), and earnings before tax were MNOK 240.5 (MNOK 262.9). This gives earnings per share of
NOK 1.3 (NOK 1.6). The consolidated operating profit for the third quarter was MNOK 223.5 (MNOK 335.2). Net financial items were MNOK -11.3 (MNOK -80.8).

At the end of the quarter, orders-on-hand for construction operations totalled BNOK 11.3, as against BNOK 10.6 at the turn of the year, and BNOK 11.2 at the same time last year.

The Group maintains a strong financial position.

The Veidekke Group during this quarter

In the third quarter, Veidekke’s turnover was down 22 per cent compared with the turnover for the third quarter of 2008. In spite of this, Veidekke achieved a result that was merely MNOK 20 below last year’s result, with a higher profit margin.

The decrease in turnover is a result of the ongoing recession. In this situation, we are pleased to see that the construction industry as a whole is continuing to achieve healthy profit margins, and that the order backlog is being strengthened. There are still relatively large variations between countries and regions, and once more, construction operations in Norway come out top of the class.

Housing sales are also showing continued progress, particularly in the regions surrounding Oslo and Stockholm. There is still a fairly clear preference for terraced houses and low-rise buildings, while sales are comparatively weak when it comes to the more traditional flats in larger buildings. Apart from a small project in Sweden, building has not started in any new housing projects this quarter. It will take a while yet before the increase in sales manifests itself in substantially increased income. However, this will gradually improve during the next few quarters, as we are expecting building to start in several new projects.

Within industry operations, turnover remained stable throughout the quarter, but the result for the area as a whole was weak due to further allocations within operations and maintenance. There are still some contracts within this area to which a degree of uncertainty is attached, but the number of such contracts is now limited.

For asphalt operations, the quarter was satisfactory, both in terms of volumes and profits. However, reduced activity in the building and construction market is causing lower volumes within crushed stone and gravel, albeit with satisfactory results.

All in all, the third quarter was positive for Veidekke’s operations seen as a whole.

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 2,840 for the third quarter (MNOK 3,621 for third quarter 2008), and earnings before tax amounted to MNOK 141.0 (MNOK 184.1).
The profit margin was 5.0 per cent (5.1 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 third quarter, property operations in Scandinavia had a turnover of MNOK 105 (MNOK 361 in third quarter 2008). Earnings before tax were MNOK -12.2 as against MNOK -53.2 in the same quarter of 2008.

Following a period of extremely low sales and few initiated projects, the market has shown a gradual improvement over the last two quarters. Sales of completed dwellings were good in the Oslo and Stockholm regions, and new projects put up for sale have achieved satisfactory sales. This gives cause for optimism, although the market for blocks of flats is still hesitant in many areas. Several projects will be started up both in Norway and Sweden during the fourth quarter.

Because of the low start-up rate in recent years, property operations only had 194 dwellings under construction at the end of the quarter, spread over nine projects. The equivalent numbers for the third quarter of 2008 were 1,034 dwellings under construction in 24 projects.

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.