VolkerWessels expects positive market trends to continue in second half of the year
Koninklijke VolkerWessels N.V. reports an all-time high order book in its Half Year 2018 report, which is a reflection of the positive trends in the markets in which the multi-branded construction company operates. The company sees a satisfactory underlying operational performance. VolkerWessels hasdecided to report the OpenIJ project separately going forward. This is showing its focus on the project and allows its shareholders to better evaluate the performance of the company and its segments.
HIGHLIGHTS
- Net result € 43 million (+16%); net result incl. OpenIJ provision after tax € 19 million (-49%)
- EBITDA of € 93 million (+3.3%); EBITDA incl. OpenIJ provision € 61 million (-32%)
- Net cash position improved by € 116 million to € 13 million
- Order book at historic high of € 8,767 million (+4.1%)
- Expect to pay interim dividend equal or slightly better than € 0.28 per share paid in November 2017
- Reconfirms to be on track to meet medium-term objectives, we changed our medium-term objective to improve strategic working capital from € 100 million to € 200 million
Jan de Ruiter, Chairman of the Management Board
‘The markets in which we are active are very strong. Demand for our products and services remains high. As a result of this continued increased demand, our order book has reached an all-time high at € 8,767 million (up 4.1% versus 30 June 2017). The order book of C&RED increased by over € 500 million, including new significant long-term residential development positions in the cities of Amsterdam, Delft and Utrecht securing long term production volume. The decision by the Dutch government to stop gas connectivity for new build homes after the 1st of July 2018 may temporarily impact the growth of the construction of new homes in the Netherlands. With our MorgenWonen® product, we are very well positioned for this new development.
The EBITDA, excluding the provision for OpenIJ, for H1 2018 of € 93 million is well above the range of € 85 - € 91 million that we expected in the press release of 3 July. Our working capital improved and our net cash position improved by € 116 million. As we reduced our strategic working capital close to € 100 million, I am proud to announce that we have decided to change our medium-term objective to improve strategic working capital from € 100 million to € 200 million.
We are pleased by the performance of our UK operations, which has delivered strong results. Given our significant exposure to long-term infrastructure, we have seen minimal negative impact from any ongoing Brexit related uncertainty. The UK infra market continues to develop favourably and we are well placed to benefit from this trend going forward.
Our Dutch Infra segment results overall showed a lower performance. By an even stronger focus on project selection and control, we aim to restore its financial performance in line with its leading market positions in the Netherlands. On the 3rd of July, VolkerWessels announced the additional provision of € 31.5 million for OpenIJ. We have decided to report OpenIJ separately going forward allowing our shareholders to better evaluate the performance of the company and its segments.
OpenIJ is a significant outlier. Hence, when setting our interim dividend, the negative impact of OpenIJ will not be taken into account. We expect to pay an interim dividend which is equal or slightly better than the € 0.28 per share paid in November 2017. We will formally announce our interim dividend on 15 November.
Overall, controlled growth with a clear focus on improvements remains our key priority. We reiterate our expectation that our full year EBITDA result to be the same or slightly better relative to 2017 and expect all segments to contribute positively.’