Mixed picture from Heijmans
By Sandy Guthrie14 November 2011
A mixed picture is being painted by Dutch group Heijmans, with turnover from July to September rising, while it has reported no visible recovery in the housing market.
The building, engineering, property development and infrastructure group said that while the weak market left it with a less positive outlook, it expected the whole of 2011 to be profitable - barring unforeseen circumstances.
Outside the Netherlands, Heijmans operates in Belgium and Germany.
Gerrit Witzel, chairman of Heijmans' executive board, said the group's results varied across the board. While the infrastructure activities in the Netherlands and Belgium continued to perform solidly, the results in non-residential building were "clearly under pressure".
He said, "The execution in the division is not yet at the desired quality level. In the coming period, we will have to make extra efforts in non-residential building. We have seen no signs of recovery in the housing market, which is important to Heijmans. House sales continue to lag. At the same time, the residential building and the technical services activities continue to perform well.
"It remains essential that we use our solid financial position to continue to move forward even in the current difficult market conditions."
Heijmans reported that its organic increase in turnover in the July to September period was around 3%. Its total order portfolio at the end of September was more or less unchanged from the end of June.
It said that its roads and civil infrastructure division continued to record positive results and had won with its project partners a prominent integrated project for the A4 Delft to Schiedam road. It added that its operations outside the Netherlands continued to perform in line with expectations.
However, it reported that the housing market was showing no signs of recovery. It said the reduction of transfer tax had so far had no effect on home sales, and the crisis on the financial markets was proving to have a negative impact on consumer confidence. The market also continued to feel the consequences of the restrictive measures on mortgage lending, it said.
Heijmans said the prefabricated concrete market continued to be difficult, and that persistent losses at its Bestcon division required firm measures.
"A number of options will be reviewed," the company said. "Despite the progress we have made in terms of quality, the results in non-residential building remain under pressure. The limited margins that can be booked in the current market leave virtually no room for setbacks, and we will have to make additional improvements to the quality of the execution.
"We therefore do not expect the non-residential building sector to close this financial year with a profit."
Heijmans' net debt position at the end of September improved compared with the end of September 2010. It said its capital position remained strong, with a solvency ratio well above 30%.