OSLO, Norway, Feb. 17, 2006 (PRIMEZONE) -- For the second year running, Veidekke has almost doubled its profits. "Our pre-tax profit of NOK 711 million for 2005 brings us back to a profit margin of 5%, which secures our possibilities to continue the development of the Group," says President and CEO Terje R. Venold. "We are especially happy to see that the improvement in profits applies all over the Group," he adds.
"The level of activity was high throughout 2005, and the good housing market gave us corresponding sales and stable activity for our construction operations. The fact that we are now seeing positive results in both Sweden and Denmark, also gives us extra incentive and enthusiasm for further development," says Veidekke's President and CEO, Terje R. Venold. "The Norwegian operations isolated had a total result of NOK 695 million and a profit margin of 6.8%", he adds.
Operating income amounted to NOK 14,579 million in 2005, as against NOK 12,826 million in 2004.
This gives an operating profit of NOK 592.2 million compared with NOK 352.3 million a year earlier. Pre-tax profit rose to NOK 711.1 million in 2005 from NOK 382.7 million in 2004. Earnings per share were NOK 19.50 compared with NOK 9.50 in 2004. The company's equity ratio was 23.1%, as against 28.2% in 2004. Veidekke's order books showed a total of NOK 10,902 million at the end of the year, compared with NOK 9,17o million at the end of 2004. Veidekke's Board of Directors therefore proposes that a dividend of NOK 10 per share be distributed for 2005.
In recent years, Veidekke has invested substantial resources in developing its organisation, strengthening managerial skills and implementing improvement processes in all entities. "It is when times are good that we should reinforce our organisation, and we have strengthened our market positions in all three Scandinavian countries," says Mr. Venold. "The Veidekke Group has a strong financial position, an extremely healthy order situation and a motivated organisation."
Veidekke's business areas in Norway all showed positive results in 2005. The upswing was particularly noticeable in property development where good housing sales pushed the profit up. The increase for Veidekke Entreprenoer AS and the Industry Division was 17% and 45% respectively. The improvement in profit for the Industry Division is due both to an increase in volume in asphalt operations and to a gain on the sale of the remaining share in Ramirent Oyj.
In Denmark, Hoffmann A/S achieved an increase in profit of NOK 25 million, and an increase in orders-in-hand of 38% on the previous year's figure. Veidekke has also established property development operations in Denmark, where it already has several attractive housing projects under development.
Profits are also noticeably better in Sweden. Starting in 2006, Veidekke's operations in Sweden will be managed jointly as one entity. "We can already see the benefit of having one organisation in Sweden, when it comes to both technical and financial development," says Mr. Venold. "We have become a far more attractive employer in the Swedish market and our market position is much stronger."
With these good figures and Veidekke's attractive dividend policy, the recommended dividend of NOK 10 per share gives the approximately 2,000 employees who have shares in the company, a total disbursement of NOK 40 million. (See separate press release.)
Reference is also made to the Board of Directors' Report for the Fourth Quarter 2005, which is enclosed with this presentation.