Ballast Nedam: “Poor Year, Sharper Strategic Focus and Solid Refinancing”

Ballast Nedam has issued its annual results for 2013, which show that the company had a difficult year. However, its results in the offshore wind energy market were rather good.

• Results in line with the press release of 5 February 2014
• Operating loss of € 30 million, including € 18 million of restructuring costs and impairment (2012: € 31 million loss)
• The loss for the period was € 41 million (2012 € 41 million loss)
• Revenue € 1.3 billion (2012: € 1.3 billion)
• Well-filled order book of € 1.5 billion (2012 € 1.8 billion)
• Financing position of € 59 million debt (2012 € 20 million debt)
• No dividend for 2013

Strategic, operational and financial measures in 2014

• Sharper strategic focus on major integrated complex projects: further restructuring, disposals and strengthening of the balance sheet through a proposed € 30 million rights issue
• Refinancing of € 80 million completed, maturing in 2017

Prospects

• 2014 will be a transitional year

Theo Bruijninckx, Ballast Nedam’s CEO, commented:

We have a difficult year behind us, with a disappointing operating loss of 30 million euros, which includes 18 million euros of restructuring costs and impairment. The operating losses are attributable to the A15 Maasvlakte-Vaanplein highway project, several old regional infrastructure projects, two specialized companies, and undercoverage in the regional construction companies. Capacity in the two specialized companies has been reduced, and several loss-making products discontinued. The old regional infrastructure projects predate the 2012 restructuring operation, and are nearing completion.

The persistently poor market conditions, the disappointing results, and revenues from disposals that materialized later than foreseen, necessitated a further accelerated intervention on strategic, operational and financial levels alike. The strategic focus has been sharpened further. We are aiming for major integrated complex projects and related activities in the niche markets of offshore wind turbines and industrial construction. Modular building is a fitting response to clients’ life-cycle management approach. Some supply and specialized companies that no longer contribute to this strategic proposition will be disposed of.

We are restructuring the regional construction companies to form a construction company with integrated operations and a renovation company, Bouwborg, with national scope. Having made the transition to an infrastructure company with nationwide operations, and the related departure from the loss-making traditional markets, we are now focusing our organization more sharply on the strategic route that we have embarked upon. The long-term financial position has also been strengthened with support from all 5%-plus shareholders and banks. The refinancing comprises a proposed 30 million euro rights issue and new loans of 80 million euros that mature in 2017. The rights issue strengthens the balance sheet, and together with the new loans it gives the company sufficient financial scope to concentrate fully on the accelerated implementation of its strategy. Ballast Nedam is now better positioned for the future. 2014 will be a transitional year.

The key activities that are oriented to the major, integrated projects have remained profitable throughout the cycle. The results achieved on the ongoing major projects in the offshore wind turbines and industrial construction niche markets were good. The major complex construction projects also made a fine contribution. In 2013 Ballast Nedam again added several projects to its track record on the growth market of integrated projects, including the Zaanstad Penitentiary project, the Butendiek offshore wind turbine project in Germany for the design, delivery and installation of 80 foundations, and the design and construction of the Nobo Otrabanda Hospital in Curaçao. Our track record and our well-filled order book of 1 460 million euros with major integrated complex projects endorse Ballast Nedam’s strategy and underline its position in this market segment.

Press release, March 10, 2014; Image: Ballast Nedam