AF Gruppen (AFG) Q4 2023 earnings summary

Executive summary

• Q4 revenue was NOK 8,378 million and EBT NOK 292 million; FY EBT fell to NOK 700 million from NOK 1,400 million, reflecting project write-downs and estimate revisions.

• Year-end order backlog rose to NOK 41,991 million from NOK 39,765 million, while Civil Engineering and Energy and Environment delivered strong results.

Financial highlights

• Q4 revenue was NOK 8,378 million (NOK 8,568 million YoY), EBIT NOK 302 million (NOK 502 million) and EBT NOK 292 million (NOK 502 million).

• FY revenue was NOK 30,530 million (NOK 31,205 million), EBIT NOK 749 million (NOK 1,409 million) and EBT NOK 700 million (NOK 1,400 million).

• Q4 net income was NOK 200 million (NOK 428 million); FY net income was NOK 515 million (NOK 1,151 million).

• Q4 operating cash flow was NOK 855 million versus negative NOK 38 million; FY operating cash flow was NOK 1,552 million versus NOK 1,460 million.

Outlook and guidance

• Construction outlook: tougher near-term competition, but demand remains; prioritize suitable projects, reliable partners, risk management and adaptability.

• Management cited positive market signals alongside global uncertainty that may affect activity and profitability in the coming year.

• Norwegian civil engineering market growth is forecast at 3.5% in 2024 and 2.2% in 2025; Norway’s construction production value is forecast to fall 1.8% in 2024 and rise 9.0% in 2025.

• Swedish building investments are forecast to fall 7.3% in 2024; Norwegian housing starts are forecast at 26,000 in 2024 and 31,000 in 2025.