As expected, revenue and earnings fell in the first quarter. The full-year outlook is unchanged in view of rising order intake and efficiency gains resulting from MT Højgaard’s Focus 2018 programme.
MTH GROUP’s first-quarter revenue was DKK 1.5 billion, down 10% on the same period last year due to lower order intake in 2017. EBIT was a loss of DKK 56 million, compared with a loss of DKK 22 million in the first quarter of 2017. Earnings were affected by falling revenue, low use of capacity and write down on a single project, where a potential compensation claim against partners cannot yet be recognised.
Order intake of DKK 3.4 billion since the turn of the yearMTH GROUP won new orders totalling DKK 1.4 billion in the past quarter, compared with DKK 1.0 billion in the same period last year – a growth of 37%. At the end of the quarter, the order book amounted to DKK 6.9 billion, with a good spread on a number of major projects and many smaller projects with quick start-ups that will generate revenue already in 2018. In April, the Group won further orders for around DKK 2 billion, particularly for MT Højgaard.
- One of our top priorities is to use our skills to win new, attractive orders of the right quality. We believe we have the correct market focus and that our approach to digitalisation and development of new forms of collaboration is right. However, earnings in MT Højgaard are currently unsatisfactory, so we need to improve MT Højgaard’s competitiveness still further. The initiatives for strengthening MT Højgaard are brought together in the Focus 2018 programme under the headings Improved competitiveness, Increased order intake and Stable operation, says President and CEO Torben Biilmann.
The programme is expected to reduce total costs in MT Højgaard by about DKK 100 million and the savings will be fully effective from 2019.
Reduced risk on legacy offshore guarantee obligationsOperating cash flow amounted to DKK -322 million in the first quarter of 2018, compared with DKK 1 million in the same period last year. Operating cash flows were mainly driven by payment of settled legacy offshore guarantee obligations that the Group made provision for under special items in 2017. This means that the risk of guarantee obligations on legacy offshore projects that have long since been completed is now significantly reduced.
As a result of major payments in the last six months relating to legacy offshore projects, the MTH GROUP’s owners have decided to strengthen the liquidity and capital base through a subordinated loan of DKK 150 million, which was set up on 9 May 2018. This was done in order to ensure that MTH GROUP’s development opportunities will not be limited by the effect of the legacy offshore projects and to support the Focus 2018 programme.
Unchanged outlook for 2018MTH GROUP maintains its outlook for 2018 of revenue of around DKK 6.8 billion and EBIT in the range of DKK 140-180 million.
Earnings are expected to improve over the year as a result of increasing revenue, the effect of the capacity adjustment that has already taken place in MT Højgaard and the other Focus 2018 initiatives, which are expected to start contributing to earnings in the second half year.
By their nature, forward-looking statements involve risks and uncertainties that may cause actual performance to differ materially from that contained in the forward-looking statements.
The quarterly report is available at the MTH GROUP website