Heijmans under pressure

Dutch contractor Heijmans reported year-on-year falls in revenues, underlying operating income and its order book for the first half of 2012 after weak conditions in the residential building market impacted its results.

Revenues were €1.06 billion for the first six months of the year, compared to €1.08 billion for the same period in 2011, while underlying operating income fell to €4 million, from €12 million a year ago. The company's order book at 30 June, 2012, totalled €2.2 billion, down from €2.3 billion at the same point in 2011.

In terms of divisions, Heijmans recorded an underlying operating loss of €1 million in its Dutch property development division, a slight improvement on the loss of €4 million it reported for the first six months of 2011.

The Dutch residential division recorded underlying operating income of €2 million, down from €10 million a year ago, while the domestic non-residential division reported an underlying operating loss of €4 million, compared to income of €3 million for the first half of 2011.

The Dutch roads and civil engineering division also reported a drop in first half underlying operating income to €13 million, compared to €16 million last year.

Outside of The Netherlands, Heijmans' Belgium division reported underlying operating income of €6 million for the first half, up from €3 million a year ago, while the German division saw its underlying operating loss narrow to €1 million, from a loss of €3 million a year ago.

Heijmans chairman Bert van der Els said, "We see opportunities in the market for large-scale integrated projects, but the residential market remains poor. In order to move ahead we will have to work on improving our operating processes in the coming years."

To this end, Mr van der Els said the company would focus on cost reductions, process improvements and margins over volume.

He added, "The operating result is in line with expectations and confirms the prediction of a positive result for the second half of the year. The challenge lies in picking up the pace."