Nordecon Group's preliminary unaudited financial results for Q4 and 12M 2010

Tallinn, Estonia, 2011-02-10 06:59 CET (GLOBE NEWSWIRE) -- Nordecon reports its unaudited preliminary results for Q4 and 12M of the year ended 31 December 2010. The full unaudited interim report for the period will be released on 21 February 2011.

Consolidated statement of comprehensive income

 Consolidated statement of financial position

Brief commentary on the financial and operational highlights and exceptional/non-recurring write-downs:

Nordecon Group ended the second consecutive quarter with a positive gross profit despite the fact that due to changes in estimates additional losses were recognised at the year-end for some projects started at the beginning of the year. The Group’s performance was also influenced by complicated weather conditions that caused the costs incurred under road maintenance contracts to exceed corresponding revenues.

Nordecon’s administrative expenses totalled €4.9 million, a €3.1 million decrease year-over-year. We achieved the two targets set for administrative expenses – at least a 30% year-over-year decrease and a less than 5% ratio of administrative expenses to revenue. Determined cutting of administrative expenses through the past two years has allowed controlling the costs directly dependent on the company so that their reduction has outpaced the decline in construction volumes and margins. The cuts will have a positive impact on subsequent periods, both in the seasonal and longer term, particularly in light of the possibilities for the recovery of the construction market from the second half of this year.

Other operating expenses for Q4 include a loss of €2.7 million resulting from the write-down of receivables related to the construction of the Pärnu Keskus (Pärnu Centre). After this write-down, the balance sheet of Nordecon’s subsidiary Eston Ehitus includes no more receivables from the counterparties of the said contract or companies related to them.

Other operating expenses for Q4 also include an impairment loss of €0.3 million recognised for the full write-down of the goodwill that arose on the acquisition of the subsidiary Magasini 29.

Finance expenses for Q4 include a loss of €1.7 million recognised in connection with the realisation of the commitments of the former Latvian subsidiary Nordecon Infra SIA, which were secured by Nordecon AS. In combination with the gain on the sale of the subsidiary recognised in Q1 and other write-downs, the net result of exiting the investment is a loss of €0.5 million. 

At 31 December 2010, the Group’s order book stood at €88.3 million (31 December 2009: €97.8 million). Over the recent quarters, the size of the order book has been relatively stable as the Group has tried to avoid increasing its volume rapidly in a market where input prices are rising more quickly than the values of contracts secured. Contracts won by the Infrastructure segment still dominate the order book, accounting for up to three fourths of its total volume. 

Nordecon is a group of construction companies whose core business is construction project management and general contracting in the buildings and infrastructure segment. Geographically the Group operates in Estonia, Ukraine and Finland. The parent of the Group is Nordecon AS, a company registered and located in Tallinn, Estonia. In addition to the parent company, the Group includes more than 10 subsidiaries. The Group’s consolidated revenue for 2009 was €155 million. Currently Nordecon Group employs nearly 700 people. Since 18 May 2006, the company's shares have been quoted in the main list of the NASDAQ OMX Tallinn Stock Exchange.

         Raimo Talviste
         Nordecon AS
         Head of Finance and Investor Relations
         Tel: +372 615 4445
         Email: raimo.talviste@nordecon.com
         www.nordecon.com