For the first time in five years, MT Højgaard posted an operating profit in a first quar-ter, normally the slowest time of the year for the construction industry. The effects of the Group's turnaround of the past two years are clearly beginning to show.
The MT Højgaard Group generated satisfactory revenue and earnings for the first three months of 2015. Total revenue was DKK 1,656 million, which was in line with expectations and an 8% improvement over the first quarter of last year.
The Q1 operating profit before special items of DKK 50 million, which corresponds to an operating margin of 3%, reflects the results of the past two years' extensive efforts to refocus the Group's business operations, management systems and organisation. Last year, the Group re-corded a Q1 operating loss before special items of DKK 30 million. At DKK 79 million, the Q1 cash flows from operating activities were also positive.
“We implemented the biggest parts of our extensive turnaround in 2013 and 2014, but we're not quite there yet, so we will continue our efforts in all areas. Still, the improvements we've achieved so far clearly indicate to us and the world that the MT Højgaard Group is on the right track,” said MT Højgaard President & CEO Torben Biilmann.
Having refocused its processes and the organisation over the past couple of years, the Group now has much stronger risk management, greater flexibility and better customer focus.
Many new orders and project wins
The Group won new orders for DKK 1.3 billion in the first quarter. Due to highly time-consuming approval processes, the Group had also won additional projects for a similar amount, but these had not yet been contracted by the end of the quarter. Even then, the order book stood at more than DKK 6 billion at 31 March 2015. The last of the older projects with low or negative profitability were completed in 2014, and the Group's current order book is profitable and has a sound risk profile.
Positive outlook maintained
Management continues to expect revenue of DKK 7.0-7.5 billion and an operating profit before special items of DKK 300-375 million, for an EBIT margin of 4-5%. It also maintains the target for the turnaround process of lifting the EBIT margin to 5% by the end of the year and its expectations for an overall EBIT margin of 5% in 2016.
Forward-looking statements are inherently subject to risk and uncertainty which may cause actual developments to differ materially from the guidance provided.
The quarterly report is available here