Veidekke (VEI) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was NOK 10.8 billion, down 3% from Q2 2023, with profit before tax of NOK 484 million and improved margins year-over-year.

• Order book at quarter-end was NOK 41.1 billion, with 54% to be executed in the next 12 months and solid intake mainly from public projects.

• Infrastructure Norway delivered strong growth and profitability, especially in asphalt operations, while Construction segments in Norway and Sweden saw revenue declines.

• Fatality occurred at a Malmö project; investigations ongoing, with no other serious injuries in the quarter.

Financial highlights

• Profit before tax was NOK 484 million, up 25% from NOK 387 million in Q2 2023; operating profit (EBIT) NOK 466 million.

• Group profit margin improved to 4.5% from 3.5% year-over-year; operating margin at 4.3%.

• Equity ratio at 14% and return on equity (12 months) at 14%.

• Net interest-bearing position/assets at NOK 1.0–1.024 billion as of June 30, 2024.

• Dividend of NOK 7.90 per share (NOK 1,066 million total) paid in Q2 2024.

Outlook and guidance

• Revenue expected to decline in 2H 2024 due to lower order intake in Construction; infrastructure demand remains robust.

• Construction Sweden faces continued weakness due to residential market decline and restructuring; no short-term improvement anticipated.

• Market outlook remains uncertain due to high commodity prices, inflation, and weak residential sales.

• Interest rate developments will influence market sentiment.