Unprofitable projects and costs for restructuring resulted in a loss of DKK 512 million in 2012. Turnaround under new management to improve profitability substantially.
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In 2012, the revenue of the MT Højgaard Group was DKK 9.7 billion. However, due to poor profitability in previously made contracts the pre-tax profit ended at DKK -512 million, which is on par with the latest announced outlooks.
- Such a performance is highly unsatisfactory, says Torben Biilmann, who took up the position as President and CEO in November 2012. He emphasises that the subsidiary undertakings overall contribute positively, whereas the problems have been concentrated in the parent company.
The poor financial performance is caused by weak profitability in previous contracts, costs for restructuring plus considerable provisions made for projects already handed over.
A more strict follow-up on the projects has been introduced together with a more careful assessment of the risks involved in each of the new projects which the Group enters into. At the same time, the organisation has been changed so that each business area knows exactly what its responsibilities and goals are.
A better financial performance is expected in 2013
For 2013, the Group expects a revenue in the region of DKK 7 billion. The decline from 2012 is a consequence of the more strict selection of new projects based on strengthened requirements for profitability and risk. At the turn of the year, the volume of orders amounted to DKK 6 billion of which DKK 4.9 billion are projects to be executed this year.
The financial statements for both 2013 and 2014 will still reflect a weak profitability in the volume of orders. However, a small positive financial performance in 2013 is expected. But this will not be achieved until the second half of the year. The long-term ambition to achieve a pre-tax margin of 5% is maintained.
- MT Højgaard has strong competencies, and despite the important challenges the whole organisation has the competencies and the will to develop the Group and create new success. In connection with the considerable changes we already have implemented and still are implementing I am certain that we can create a well-earning group in the next few years, says Torben Biilmann.
The annual report for the MT Højgaard Group can be found here