For your information Monberg & Thorsen A/S owns 46% of the shares in MT Højgaard a/s.

Transcription

1 Stock Exchange Announcement No. 20, 2003 MT Højgaard a/s quarterly report third quarter 2003 Enclosed please find quarterly report for the third quarter 2003 about the activities during 1 January 30 September For your information Monberg & Thorsen A/S owns 46% of the shares in MT Højgaard a/s. Yours faithfully, Monberg & Thorsen A/S Mogens Granborg Chairman of the Board Erik Søndergaard President

2 Quarterly report - Third quarter 2003 (1/1 30/ ) The Supervisory Board of MT Højgaard a/s has considered and approved the Company's quarterly report for the third quarter The quarterly report is unaudited. Søborg, 27 November 2003 Supervisory and Executive Boards Per Møller Chairman of the Supervisory Board Kristian May President and CEO Any questions relating to this announcement should be directed to Kristian May, President and CEO, on telephone , or to Per Møller, Chairman of the Supervisory Board, on telephone This announcement can also be viewed on MT Højgaard's website: This announcement is available in Danish and English. In the event of discrepancies, the Danish version shall prevail. MT Højgaard a/s Quarterly report 3:2003 Page 1 of 12

3 Favourable development within the contracting activities Revenue for the first three quarters was DKK 5,886 million and pre-tax profit was DKK 17 million. Revenue for the third quarter amounted to DKK 1,901 million compared to DKK 2,362 million for the third quarter Pre-tax profit was DKK 14 million versus a loss of DKK 109 million for the third quarter a year ago. The profit for the third quarter benefited from favourable development within the contracting activities but was adversely affected by additional costs in respect of the Buxton project. The order book stood at DKK 4,663 million at the end of the third quarter, equivalent to about seven months' production, which is satisfactory. Earnings expectations for 2003 reaffirmed Full-year production revenue is expected to reach approx. DKK 8.0 billion, and full-year pre-tax profit is still expected to be in the region of DKK 50 million. MT Højgaard a/s - Quarterly report 3:2003 Page 2 of 12

4 Group financial highlights (The quarterly report is unaudited) Amounts in DKKm rd quarter 3 rd quarter Year Income statement Revenue 1,901 2,362 5,886 7,241 9,668 Operating profit (loss) (EBIT) 13 (105) 19 (108) (429) Interest income and expense and similar items and profits (losses) of associates 1 (4) (2) (9) (15) Profit (loss) before tax 14 (109) 17 (117) (444) Group share of profit (loss) for the period 9 (77) 9 (83) (378) Balance sheet Share capital Equity Balance sheet total 3,493 3,691 3,737 Interest-bearing assets Interest-bearing liabilities Invested capital 938 1,243 1,007 Cash flows Cash flows from operating activities 123 (11) (9) Cash flows for investing activities (47) (113) (164) Cash flows from financing activities Total cash flows 375 (24) (66) Financial ratios (%) Gross margin 5.6 (0.6) (0.1) Operating margin 0.7 (4.4) 0.3 (1.5) (4.4) Profit margin 0.5 (3.2) 0.2 (1.1) (3.9) Return on avg. inv. capital for the period (ROAIC) 1.9 (8.8) (38.9) Return on equity after tax for the period (ROE) 1.3 (10.1) (55.3) Equity ratio Other information Order book, end of period 4,663 6,078 5,327 Average number of employees 5,472 6,576 6,225 The quarterly report has been prepared in accordance with the Danish Financial Statements Act, Danish accounting standards and the Copenhagen Stock Exchange financial reporting requirements for listed companies. The accounting policies remain unchanged. A few reclassifications and changes have been made in the cash flow statement. The comparative figures have been restated accordingly. The ratios have been calculated in accordance with the Danish Society of Financial Analysts' guidelines for the calculation of ratios. MT Højgaard a/s - Quarterly report 3:2003 Page 3 of 12

5 Group diagram Management Secretariat Administrative Service Project Development Production Systems Contracting Design Plant & Equipment Concrete Subsidiaries Civil Engineering Lindpro a/s Promecon as Regions Refurbishment Residential BMS A/S Enemærke & Petersen a/s Scandi Byg a/s Marius Hansen Facader a/s MT Højgaard (UK) Commercial Small companies have been omitted from the Group diagram. Seth, Lda. Greenland Contractors (66 2/3 %) As previously announced, the above organisational structure entered into effect on 1 July 2003, and the reporting has been adjusted to the new structure. The figures for 2002 and 2003 have been restated to make them comparable. MT Højgaard's contracting operations are divided into four business areas: Civil Engineering, Residential/Commercial, Refurbishment, and Regions. The business units Design, Plant & Equipment and Concrete function as competence centres for the entire company and are included under "Others" in the segment information, along with Management Secretariat, Project Development, Administrative Service and Production Systems, etc. The Group's development in the third quarter 2003 Revenue and earnings performance MT Højgaard delivered pre-tax profit of DKK 14 million for the third quarter. The profit for the period benefited from favourable development within the contracting activities. The profit for the third quarter also benefited from reversal of provisions in connection with agreed settlements and a reduced risk profile on work in MT Højgaard a/s - Quarterly report 3:2003 Page 4 of 12

6 progress. The profit was adversely affected by additional costs in respect of the Buxton project. These factors depressed the profit for the first three quarters by approx. DKK 20 million net. The difficult conditions relating to the completion of the cement factory in Buxton led to increased consumption of resources, and it has been necessary to take on additional tasks to ensure the completion of the project. MT Højgaard's share of the project is expected to reach completion around the end of the year. Claims have been advanced against MT Højgaard as a result of extra works, delays and disruptions in production, and provisions have been made in this respect on the basis of an evaluation of these claims. The statement of the total costs on the project is still subject to uncertainty. MT Højgaard has similarly advanced claims for extra payment and extension of time. As the outcome of these claims is still to be clarified, no income has been recognised in the financial statements in this respect, in accordance with the company's policy. The Group reported revenue of DKK 1,901 million for the third quarter versus DKK 2,362 million in At DKK 5,886 million, revenue for the first three quarters was down DKK 1,355 million. International activities accounted for 10% of revenue against 17% for the same period last year. As previously announced, the decline in revenue is a consequence of the strategy of focus and the market development. Operating profit (EBIT) for the third quarter was DKK 13 million, and profit for the first three quarters was DKK 19 million. As announced in connection with the interim report, the organisation has been adjusted and the number of staff cut in step with the market potential. It is estimated that the number of salaried staff, which stood at 1,925 at the end of 2002, will have been reduced by about 340 by the end of The full effect on earnings of these adjustments will not be felt until in Interest income and expense and similar items amounted to a net charge of DKK 2 million for the first three quarters compared to DKK 6 million for the same period in Pre-tax profit for the first three quarters was DKK 17 million, and profit after tax and minority interests was DKK 9 million compared to the DKK 83 million loss reported for the same period last year. Balance sheet and statement of changes in equity The Group balance sheet stood at DKK 3,493 million at 30 September 2003, down DKK 244 million on the balance sheet total at the end of Equity amounted to DKK 810 million, corresponding to an equity ratio of 23%. The increase in equity primarily reflected the DKK 300 million capital increase in April Net interest-bearing debt has fallen by DKK 377 million in 2003, standing at DKK 128 million at 30 September 2003 against DKK 505 million at the end MT Højgaard a/s - Quarterly report 3:2003 Page 5 of 12

7 of This is due partly to the capital increase referred to above, and partly to a reduction in funds tied up in operating-related receivables. Cash flows and financial matters During the first three quarters there was an outflow of cash from operating activities of DKK 123 million compared to an outflow of DKK 11 million in the first three quarters of Cash flows for investing activities, primarily made up of replacement of and new investment in contractors' plant, etc., amounted to an outflow of DKK 47 million versus an outflow of DKK 113 million in the same period in Investments were lower than planned due to the lower level of activity. Financing activities generated a cash inflow of DKK 299 million compared to DKK 100 million in the same period last year, reflecting the capital increase. There was a total cash flow of DKK 375 million for the first three quarters against an outflow of DKK 24 million for the first three quarters of The Group's financial resources at 30 September 2003, calculated as net cash and cash equivalents, and securities and undrawn credit facilities, provide it with satisfactory liquidity of DKK 637 million. The financial resources include liquid resources in joint ventures of DKK 169 million that are available exclusively to the joint ventures. Order book The order book stood at DKK 4,663 million at the end of the third quarter. DKKm Order book, beginning of period 5,327 7,807 Order intake for the period 5,222 5,512 Production for the period (5,886) (7,241) Order book, end of period 4,663 6,078 The order book is at a level corresponding to on average about seven months' production, which is satisfactory. Contracting activities The revenue and earnings performance of each business area for the first three quarters of 2003 is focused on in the following. Civil Engineering Business area Civil Engineering comprises MT Højgaard's competencies within civil engineering, infrastructure, utility services and harbour and marine works in the Metropolitan area. Civil Engineering is also responsible for the Group's international activities within its chosen focus areas. MT Højgaard a/s - Quarterly report 3:2003 Page 6 of 12

8 Civil Engineering achieved revenue of DKK 1.0 billion in line with expectations. The satisfactory development of Civil Engineering's activities continued in the third quarter, with operating profit of DKK 58 million substantially exceeding expectations. The order book stood at DKK 0.9 billion at the end of the third quarter, and full-year revenue of DKK 1.3 billion is anticipated. Residential/Commercial Business area Residential/Commercial carries out all types of residential and commercial building projects in the Metropolitan area. The residential market developed less favourably than expected in the third quarter, and the project start-ups previously anticipated have been delayed, partly due to a change in the housing package. Similarly, the market for commercial and office buildings continued to decline and was characterised by fierce price competition on the projects that are initiated. Business area Residential/Commercial thus generated total revenue of DKK 0.9 billion and the operating result was a loss of DKK 43 million. As previously announced, the result was adversely affected by a write-down in connection with the completion of a single major project. The order book closed at DKK 0.9 billion, and Residential/Commercial expects full-year revenue of DKK 1.2 billion. Refurbishment Business area Refurbishment undertakes all types of refurbishment projects in the Metropolitan area, including conversion and conservation work as well as building trade work on new builds. Refurbishment delivered revenue of DKK 0.4 billion, below expectations, whereas the operating profit, DKK 10 million, matched expectations. The order book stood at DKK 0.3 billion at the end of the third quarter, and Refurbishment expects full-year revenue of DKK 0.6 billion. Regions Business area Regions takes care of MT Højgaard's local building and civil engineering activities across Denmark outside the Metropolitan area. The business area is organised into six regions. Regions achieved revenue of DKK 1.4 billion and operating profit of DKK 16 million, below expectations. As previously stated, this was due, in particular, to write-downs on a few projects in connection with their completion in the first months of 2003 and also to the lower level of activity. The order book stood at DKK 1.0 billion at the end of the third quarter, and Regions expects full-year revenue of DKK 2.0 billion. MT Højgaard a/s - Quarterly report 3:2003 Page 7 of 12

9 Subsidiaries The subsidiaries reported an operating loss of DKK 18 million on revenue of DKK 2.1 billion, which is substantially below expectations, principally due to higher costs for completion of the Buxton project. The subsidiaries closed the third quarter with an order book totalling DKK 1.6 billion and expect revenue of DKK 2.9 billion for Expectations for 2003 The Danish building and civil engineering market is showing a declining trend in 2003, as expected, and market prospects remain subdued. With the intensified competition and uncertain market conditions, the focus is on continued efficiency improvements and ongoing alignment of capacity to market prospects. Production revenue for 2003 is now expected to reach about DKK 8.0 billion compared to DKK 9.7 billion in Full-year pre-tax profit is still expected to be in the region of DKK 50 million. The effective tax rate for the Group is expected to be on a par with the Danish tax rate. Other information MT Højgaard a/s is owned by Højgaard Holding a/s (54%) and Monberg & Thorsen A/S (46%), which are both listed on the Copenhagen Stock Exchange. MT Højgaard a/s - Quarterly report 3:2003 Page 8 of 12

10 Group income statement Amounts in DKKm 3 rd quarter 3 rd quarter Year Revenue 1, , , , ,668.0 Production costs (1,794.6) (2,377.2) (5,577.7) (7,057.0) (9,674.8) Gross profit (loss) (15.3) (6.8) Distribution costs (27.0) (21.8) (80.4) (81.6) (123.2) Administrative expenses (66.7) (67.8) (209.3) (209.5) (299.5) Operating profit (loss) 12.9 (104.9) 18.7 (107.6) (429.5) Share of pre-tax profits (losses) of associates (0.2) 0.4 (0.3) (3.6) (4.9) Interest income and exp. and similar items 1.7 (4.1) (1.9) (5.7) (10.0) Profit (loss) before tax 14.4 (108.6) 16.5 (116.9) (444.4) Tax on profit (loss) (4.5) 32.6 (5.7) Profit (loss) before minority interests 9.9 (76.0) 10.8 (81.8) (376.0) Minority interests' share of profit (loss) (0.7) (0.7) (1.5) (1.2) (2.5) Group share of profit (loss) 9.2 (76.7) 9.3 (83.0) (378.5) Statement of changes in Group equity Amounts in DKKm Year Equity at 1 January Capital increase Foreign exchange adjustments, etc. (1.2) Profit (loss) for the period 9.3 (83.0) (378.5) Value adjustments of hedging instruments at 1 January (0.9) - - Value adjustments of hedging instruments at end of period 1.1 (0.2) 0.9 Equity at end of period Group cash flow statement Amounts in DKKm Year Operating activities Operating profit (loss) 18.7 (107.6) (429.5) Non-cash operating items Cash generated from operations (operating activities) before changes in working capital, etc Changes in working capital, etc. (77.7) (20.4) (63.8) Cash flows from operating activities (10.7) (8.7) Cash flows for investing activities (47.0) (113.5) (163.8) Cash flows from financing activities Total cash flows (24.3) (65.9) Cash and cash equivalents at start of period (217.6) (151.7) (151.7) Cash and cash equivalents at end of period (176.0) (217.6) MT Højgaard a/s - Quarterly report 3:2003 Page 9 of 12

11 Group balance sheet Amounts in DKKm Year Assets Fixed assets Intangible assets Property, plant and equipment , ,024.0 Investments Total fixed assets 1, , ,091.9 Current assets Deferred tax asset Inventories Contract work in progress Receivables 1, , ,683.0 Securities Cash at bank and in hand Total current assets 2, , ,645.3 Total assets 3, , ,737.2 Equity and liabilities Equity Minority interests Provisions Deferred tax Other provisions Total provisions Liabilities other than provisions Long-term liabilities other than provisions Contract work in progress Other short-term liabilities other than provisions 1, , ,602.5 Total liabilities other than provisions 2, , ,859.8 Total equity and liabilities 3, , ,737.2 MT Højgaard a/s - Quarterly report 3:2003 Page 10 of 12

12 Segment information Amounts in DKKm 3 rd quarter 3 rd quarter Year Activities primary segment Revenue Civil Engineering , , ,409.7 Residential/Commercial , ,695.9 Refurbishment Regions , , ,555.2 Others/eliminated (5.9) 24.3 (45.1) 39.5 (8.3) Contracting activities 1, , , , ,431.0 Subsidiaries , , ,237.0 MT Højgaard Group 1, , , , ,668.0 Operating profit (loss) (EBIT) Civil Engineering (2.0) Residential/Commercial (12.5) 3.3 (43.0) 16.8 (26.6) Refurbishment Regions (3.0) Others 30.9 (3.5) (4.0) (33.1) (83.2) Contracting activities (92.3) Subsidiaries *) (44.8) (112.3) (18.2) (126.1) (337.2) MT Højgaard Group 12.9 (104.9) 18.7 (107.6) (429.5) Order book, end of period Civil Engineering , ,097.3 Residential/Commercial , Refurbishment Regions 1, , Others/eliminated 2.4 (18.3) 9.9 Contracting activities 3, , ,291.3 Subsidiaries 1, , ,035.7 MT Højgaard Group 4, , ,327.0 Geographically - secondary segment MT Højgaard Group Revenue Denmark 1, , , , ,120.1 Revenue Rest of world , ,547.9 MT Højgaard Group 1, , , , ,668.0 *) Incl. Buxton project. The segment information is comparable as the figures for previous periods have been restated to reflect the new organisational and reporting structure from 1 July MT Højgaard a/s - Quarterly report 3:2003 Page 11 of 12

13 Group income statement broken down by quarter (unaudited) 2003 Amounts in DKKm 1 st quarter 2 nd quarter 3 rd quarter 4 th quarter Total Revenue 1, , ,901.2 Production costs (1,833.1) (1,950.0) (1,794.6) Operating profit (loss) Distribution costs (28.8) (24.6) (27.0) Administrative expenses (70.1) (72.5) (66.7) Operating profit (loss) (26.6) Share of pre-tax profits (losses) of associates 0.1 (0.2) (0.2) Interest income and expense and similar items (6.4) Profit (loss) before tax (32.9) Tax on profit (loss) 9.1 (10.3) (4.5) Profit (loss) before minority interests (23.8) Minority interests' share of profit (loss) (0.3) (0.5) (0.7) Group share of profit (loss) (24.1) Amounts in DKKm 1 st quarter 2 nd quarter 3 rd quarter 4 th quarter Total Revenue 2, , , , ,668.0 Production costs (2,121.7) (2,558.1) (2,377.2) (2,617.8) (9,674.8) Gross profit (loss) (15.3) (190.3) (6.8) Distribution costs (28.5) (31.3) (21.8) (41.6) (123.2) Administrative expenses (71.6) (70.1) (67.8) (90.0) (299.5) Operating profit (loss) (4.8) 2.1 (104.9) (321.9) (429.5) Share of pre-tax profits (losses) of associates (0.9) (3.1) 0.4 (1.3) (4.9) Interest income and expense and similar items 0.0 (1.6) (4.1) (4.3) (10.0) Profit (loss) before tax (5.7) (2.6) (108.6) (327.5) (444.4) Tax on profit (loss) Profit (loss) before minority interests (4.0) (1.8) (76.0) (294.2) (376.0) Minority interests' share of profit (loss) 0.0 (0.5) (0.7) (1.3) (2.5) Group share of profit (loss) (4.0) (2.3) (76.7) (295.5) (378.5) MT Højgaard a/s - Quarterly report 3:2003 Page 12 of 12