Annual report 2018: Revitalisation of MT Højgaard

FOURTH QUARTER 2018

The fourth quarter was the best quarter of the year, as expected, with revenue of DKK 1.9 billion and EBIT of DKK 1 million. The results are in line with the latest outlook.

• Revenue was down 6%. Enemærke & Petersen delivered its highest revenue to date, while MT Højgaard was still affected by the low order intake in 2017
• Earnings were affected by a number of accounting estimates related to the Group’s projects and disputes, as expected
• Order intake was DKK 2.1 billion, continuing the positive trend from the first three quarters of the year

FINANCIAL PERFORMANCE IN 2018

The Group reported revenue of DKK 6.8 billion and EBIT amounting to a loss of DKK 547 million, as expected.

• Revenue was down 8%, excl. DKK 0.3 billion in revenue from Greenland Contractors in 2017
• The unexpected arbitration award in the MgO board case had a significant impact on earnings
• Earnings were also affected by a number of factors in the parent company MT Højgaard, pri-marily low use of capacity in the first half, severance pay, and write-downs on a major civil works project by DKK 130 million in total in the first three quarters of the year
• Order intake of DKK 8.9 billion, up from DKK 6.1 billion in 2017, was driven by a higher win rate in MT Højgaard
• The order book grew to DKK 9.1 billion at the end of the year, up from DKK 7.0 billion in 2017
• Equity ratio of 16.7%, incl. recognition of drawn down DKK 250 million subordinated loan from Knud Højgaards Fond
• Higher customer satisfaction and marked improvement in safe working environment
  

- The extremely unsatisfactory earnings in 2018 emphasise the need to put MT Højgaard’s’ opera-tions back on a healthy footing. We are working on adapting our procedures to create a simpler, more cost-effective organisation, in which the focus is on quality in bidding, risk reduction and efficient execution. We are also focusing on projects that will enable us to achieve reasonable contribution margins and critical mass. We have recently rejected a few projects and we will be making further critical selections and rejections in order to ensure sound operations and earnings, says President & CEO Anders Heine Jensen.

OUTLOOK FOR 2019

The Group will continue to have projects with low or no earnings in 2019, and there will still be a risk of variations on some MT Højgaard projects.

• Revenue is expected to be around DKK 7.0 billion, the majority of which has been secured by the order book
• EBIT is expected to be around DKK 75 million

CAPITAL POSITION

On 7 February 2019, Knud Højgaards Fond announced that, following the merger of Højgaard Holding A/S and Monberg & Thorsen A/S (expected to take place on 5 April 2019), it will provide a loan to the new merged company, MT Højgaard Holding A/S, to be used for a DKK 400 million capital increase in MT Højgaard A/S.

- The revitalisation of MT Højgaard will not happen overnight. We have a great deal of work ahead of us, and 2019 will be a year of transition, in which we must first of all turn things around and create a sustainable foundation, so that we can increase profitability and improve cash flows year by year. That is why we are delighted about the loan commitment from Knud Højgaards Fond, which will ensure a sound basis for putting operations back on a healthy footing, says President & CEO Anders Heine Jensen.

The annual report can be read at mthgroup.eu/Finance/Reports.