Koninklijke VolkerWessels N.V. reports - excluding the impact of IFRS 16 - a stable underlying EBITDA of € 93 million, a record high order book of € 9.4 billion and confirms outlook for 2019. All segments contributed to our EBITDA, these results are underpinned by sound operational cash flows.
The above numbers are excluding the impact of IFRS 16.
“Underlying EBITDA – i.e. excluding OpenIJ – was € 93 million, unchanged from H1 2018. Stepping away from the impact of IFRS 16 EBITDA increased from € 61 million to € 85 million in H1 2019. The balance of € 24 million is the result of improved operational performance particularly driven by a lower loss provision for OpenIJ in H1 2019. Our Energy & Telecoms Infrastructure, United Kingdom and Germany businesses showed improved operational performance. Construction & Real Estate Development came in slightly lower due to the absence of significant real estate transactions in the first half of the year. The number of houses sold increased to 1,278 (versus 1,076 in the same period last year). In North America, our results are behind last year which is partly weather related, the effect from lower results from participating interests and lower land sales in the US.
During the last quarter, risks and uncertainties increased in the markets in which we operate. We expect that the recent ruling by the State Council in the Netherlands on nitrogen emissions may have a significant negative impact on the commencement of infrastructure and certain construction projects. Brexit remains unpredictable and weighs more and more on the economic development of the UK while in Germany the discussion in the Berlin council on potentially freezing rent increases is causing investors to become more cautious.
Despite these risks and uncertainties, we see an overall continuous inflow of projects in our order book and as a consequence we are able to take confidence in our outlook for the remainder of the year. Our order book at the end of June was € 9,352 million which is yet again a record high. Worthy of note are some significant orders in North America (where we won four long term maintenance contracts in the provinces of Alberta and British Columbia), the United Kingdom and in our Construction and Real Estate Development segment.
Stepping away from the impact of IFRS 16 on the lease liabilities included in the debt position, the net cash position increased by € 186 million to € 199 million. This is a reflection of our ongoing profitability, a strong focus on traditional working capital and the successful reduction in strategic working capital. Including the IFRS 16 impact on the 30 June 2019 balance sheet, the net debt position is € 37 million at the end of June, a decrease of € 50 million as compared to June 30 2018.
The construction of the sea lock at IJmuiden is progressing well with now approximately 72% complete. The immersion of the second caisson is progressing well. The loss provision for OpenIJ has been increased by € 4 million in the second quarter (bringing the total impact to € 7.5 million in H1 2019), with the total VolkerWessels’ share of the provision increasing to € 114 million.
Our focus continues to be on controlled and profitable growth. In order to achieve this we have started our leadership development programme in the Netherlands, as well as a group-wide digitalisation initiative to introduce new technology into our business processes. We believe that applying new, digital tools – while continuing to focus on better project management will help us to reduce our failure costs. Other important factors in being able to achieve our goals are to ensure top level contract management and a relentless focus on delivery. We are pleased to confirm our expectation that our EBITDA for the full year - excluding the IFRS 16 impact - will increase as compared to the € 251 million we recorded during 2018.”
Extended version press release:
It has been announced today that Naomi Connell, VolkerWessels UK's chief finance officer has been named as one of the top 100...