STOCKHOLM, Sweden, October 25, 2002 (PRIMEZONE) -- Scandiaconsult (Stockholm:SCC):
-- Profit after net financial items improved by 12 percent to MSEK 112.3 (100.7).
-- Operating profit excluding the refund from Alecta rose 11 percent to MSEK 85.3 (77.0).
-- Net sales increased by 7 percent to MSEK 1,185.9 (1,107.6).
-- Norwegian operations were reinforced through the acquisition of Unico AS.
-- Demand in the infrastructure sector is expected to remain strong in the foreseeable future, while further weakening is anticipated in the building construction sector. With a large share of operations in the infrastructure sector and the company's wide geographic coverage in the Nordic region, Scandiaconsult is well poised to benefit from this development.
For more information contact: CEO Torbjorn Torell or CFO Per Leopoldson, telephone +46 8 615 60 00. The report is also available at www.scc.se.
The period in review
For the first nine months of 2002 Scandiaconsult posted net sales of MSEK 1,185.9 (1,107.6), an increase of 7 percent on the corresponding period of last year. The Group's third quarter sales were up 7 percent to MSEK 352.3 (329.2). The rise in sales is primarily attributable to a better price scenario.
Demand for consulting engineering services in the Nordic market remains strong in the infrastructure sector, but is expected to decline further in the building construction sector. In the near term, Norway is expected to show stronger demand than Sweden and Finland.
Profit after net financial items during the period amounted to MSEK 112.3 (100.7), an increase of MSEK 11.6 or 12 percent compared with the same period of last year. Profit for the period included reallocated client company pension funds of MSEK 17.8, while the year-earlier figure included a supplementary payment MSEK 15.0 for the sale of Arsenalen. Third quarter profit after net financial items rose 6 percent to MSEK 28.2 (26.5). Scandiaconsult's ongoing efficiency improvement programme and a shift towards segments with favourable demand have contributed to the positive earnings trend. The operating margin strengthened to 7.2 percent excluding client company pension funds (7.0).
Acquisitions and sales
Scandiaconsult has reinforced its operations in Norway through the acquisition of Unico AS. The company is located in Kristiansand and is active in industrial engineering, structural engineering and project development. Unico has 60 employees and posted an annual turnover of around MSEK 50 in 2001. The transfer of ownership will take place on January 1, 2003.
In Finland Scandiaconsult has acquired Vesihydro Oy with around 90 employees. The transfer of ownership took place on September 1, 2002. The company is active in the Helsinki and Seinajoki areas and has an annual turnover of around MSEK 45. Vesihydro's main areas of operation are water and environmental engineering, planning of traffic systems and shipping fairways and geotechnical engineering.
On January 1, 2002, Scandiaconsult took over the firm of Siv. Ing Tom R Hansen in Norway. The company is located in Sandefjord and provides consulting engineering services in structural, civil and water/wastewater engineering, with special expertise in underwater engineering. Company has an annual turnover of around MSEK 5.
National markets Operations in Sweden Scandiaconsult in Sweden offers consulting services in structural, civil, electrical and environmental engineering, HVAC and sanitary engineering and project management including project, cost and quality control, construction management and environmental management. Infrastructure assignments account for close to half of income. The average number of employees during the period was 893.
Scandiaconsult's net sales in Sweden during the period amounted to MSEK 622.8 (615.5), an improvement that was mainly due to an improved price level. Third quarter sales reached MSEK 174.0 (178.2). During the period, Scandiaconsult continued to adapt operations to lower demand in certain segments and locations. Operating profit for the nine-month period amounted to MSEK 43.6 (44.9). For the third quarter, operating profit was MSEK 7.0 (8.9).
On the whole, demand in the Swedish market remained strong during the period, with considerable variations between locations and technical disciplines. Declining demand was noted in the building construction segment, while demand in the civil engineering segment showed positive development. This trend is expected to continue in the next few months.
Scandiaconsult has been commissioned to prepare sanitary engineering plans for system and building documents regarding a new psychiatric clinic at Sahlgrenska University Hospital East in Gothenburg, which covers a total of 20,000 square meters.
Operations in Norway
Scandiaconsult in Norway works with an emphasis on infrastructure and construction projects such as offices, housing, healthcare facilities and schools. The clients are found primarily in the national, county and municipal governments. The average number of employees during the period was 448.
During the period, Scandiaconsult's net sales in Norway rose 18 percent to MSEK 328.4 (278.7). Adjusted for currency effects, the increase was 11 percent. This sales growth was primarily attributable to an improved price level. Third quarter sales were up 20 percent to MSEK 105.5 (87.7). Adjusted for currency effects, the increase was 13 percent.
Operating profit during the period rose to MSEK 23.5 (16.4), up 43 percent on the year-earlier figure. Adjusted for currency effects, the increase was 34 percent. Operating profit for the third quarter improved to MSEK 9.9 (8.0). This earnings growth was mainly attributable to units in structural and civil engineering.
The Norwegian market noted robust development during the period. The infrastructure sector is expected to show continued positive development in the near future, while a weakening trend is anticipated in the building construction sector. In a longer perspective, the recent removal of the investment fee could have a positive impact on investments in the building construction sector.
Scandiaconsult has been awarded an assignment to plan remodelling and new construction at the Akershus Fortress in central Oslo, to which the Norwegian Ministry of Defence and Commander in Chief will be relocated. The project is scheduled for completion in 2004.
Operations in Finland Scandiaconsult in Finland offers services and expertise in urban planning, structural, civil, water/wastewater and environmental engineering. The clients are found mainly in the public sector, predominantly in infrastructure assignments. The average number of employees during the period was 498.
During the period, Scandiaconsult's net sales in Finland rose 10 percent to MSEK 245.6 (224.1). Even after adjustment for currency effects, the increase was 10 percent. Third quarter sales were up 14 percent to MSEK 75.1 (66.0). Adjusted for currency effects, the increase was also 14 percent. The increase in sales is explained by an improved price scenario and a higher number of employees.
Operating profit during the period totalled MSEK 17.6 (14.0), corresponding to an increase of 25 percent. Adjusted for currency effects, the increase also amounted to 25 percent. Operating profit for the third quarter improved to MSEK 7.1 (3.6). This earnings growth owes mainly to an improved price scenario and the stronger margins resulting from efficiency gains.
Development in the infrastructure sector remained strong during the period. However, the building construction sector noted a continued decrease in investments due to declining industrial and office construction.
In the Helsinki area, planning of the new Nordsjo cargo harbour is underway. The aims of the project are to build a modern cargo harbour and to free up land for housing construction in the city center. Scandiaconsult is part of the consulting group responsible for planning construction of road and railway connections to the harbour.
Financial position
The Group has maintained favourable liquidity despite dividend payments of MSEK 86.7 and a share buy-back for MSEK 2.9 during the period. Cash and bank and short-term investments at the end of the period totalled MSEK 213.0 (125.1). Interest-bearing liabilities decreased to MSEK 50.7 (56.5). Cash flow after investments was MSEK 129.0 (14.9) or SEK 5.58 per share (0.64)
The Group's financial position remains strong and the equity ratio at the end of the period was 45 percent (45). Shareholders' equity amounted to MSEK 356.4 (349.4), corresponding to equity per share before dilution of SEK 15.47 (15.12).
Tax
The period's tax expense was MSEK 33.7, corresponding to 30 percent of profit before tax.
Investments
New investments in tangible fixed assets amounted to MSEK 23.5 (19.7) and referred primarily to computers and other IT equipment. Depreciation of machinery and equipment during the period totalled MSEK 20.9 (20.3).
Employees
The average number of employees during the period was 1,857 (1,841). Including temporary staff, the number of employees at the end of the period was 2,105 (1,970).
Parent Company
The Parent Company reported net sales of MSEK 22.1 (17.9) during the period. Profit after net financial items was MSEK 14.2 (21.2). The year- earlier figure included a supplementary payment of MSEK 15.0 for the sale of Arsenalen. Investments in machinery and equipment totalled MSEK 0.1 (0.0). Cash and bank and short-term investments amounted to MSEK 190.8 (98.1).
Share buy-back
The annual meeting of shareholders in Scandiaconsult on May, 7 authorised the board to buy back shares in the company during the period before the next annual general meeting. During the period from August to September, Scandiaconsult repurchased 71,800 shares at an average price of SEK 40.29 each. Scandiaconsult's holdings of own shares at the end of the period amounted to 856,800 and the total number of shares outstanding was 23,040,028.
Future outlook
Demand in Scandiaconsult's areas of operation varies widely between technical disciplines and locations. This variation is expected to increase in the near future.
Declining demand is anticipated in the building construction sector, while demand in the infrastructure sector is expected to grow provided that the necessary political decisions are made. With a high proportion of operations in the infrastructure sector and the company's wide geographic coverage in the Nordic region, Scandiaconsult is well poised to benefit from this development.
Accounting principles
This interim report has been prepared in accordance with the Swedish Annual Accounts Act and the recommendations of the Swedish Financial Accounting Standards Council. The same accounting and valuation principles have been applied as in the most recent annual report.
Financial information in 2003
The year-end report for 2002 will be published on February 18. Interim report (3 months): May 8 Interim report (6 months): August 14 Interim report (9 months): October 30
This report is also available at www.scc.se.
Auditors' report
This report has not been subject to review by the Company's auditors.
This information was brought to you by Waymaker: http://www.waymaker.net.
The following files are available for download:
http://www.waymaker.net/bitonline/2002/10/25/20021025BIT00140/wkr0001.doc. The full report, including financial tables, is available at: http://www.waymaker.net/bitonline/2002/10/25/20021025BIT00140/wkr0002.pdf.