The Group generated Q3 operating profit of DKK 72 million before special items, the best quarterly performance in five years. Management upgrades its expectations for 2014 operating profit to DKK 175–200 million.
MT Højgaard improved both earnings and cash flows in the third quarter, according to the company's interim report. The impact of older, low-margin projects on the financial performance continues to diminish, and the last of the major offshore disputes have now been settled.
Operating profit was DKK 72 million for the third quarter, compared with DKK 40 million in Q3 2013, bringing operating profit for the nine months ended 30 September 2014 to DKK 88 million, compared with DKK 23 million last year. This is the highest quarterly operating profit since 2009.
Turnaround effects feeding through
- We're very pleased to note that we are now seeing the results of our extensive efforts to refocus our business operations. After a dedicated effort over the past two years, we have now successfully restored the quality and risk profile of our order book, said MT Højgaard President and CEO Torben Biilmann.
- Running through our organisation is a strong commitment to strengthening efficiency and profitability. We have also stepped up our efforts to offer new technology and better solutions to our customers, all of which is helping to shape our long-term performance and development. In other words, we're on the right track, said Mr Biilmann.
In addition, the last of MT Højgaard's old disputes relating to the offshore business area was settled last month. Overall, these matters are expected to impact the 2014 financial performance by a loss of about DKK 400 million.
DKK 6.7 billion order book
MT Højgaard won new orders of DKK 1.4 billion in the third quarter, bringing the total order book to DKK 6.7 billion, which is DKK 1.2 billion, or 21%, more than at 30 September last year.
In addition to the regular inflow of new contracts, the Group has regularly won tenders for major construction and civil works projects.
MT Højgaard now expects full-year 2014 operating profit before special items of DKK 175-200 million, equal to an EBIT margin of about 2.5%, up from the previous expectations of DKK 150-225 million. The group now expects revenue of about DKK 7 billion.
The target remains to raise operating profit (EBIT) to 5% by the end of 2015.
This announcement contains forward-looking statements, including the above financial expectations for 2014, all of which are inherently subject to risk and uncertainties that may cause actual financial results to differ materially from the guidance provided.
The interim report is available here