AF Gruppen : with strong growth and healthy result

AF Gruppen (AFG) reports a good result for Q4 and 2017. Revenues for 2017 increased by 15.4% to NOK 13,704 million and the profit margin for the year was a healthy 6.8%.  

Revenues for Q4 were NOK 4,296 million (NOK 2 892 million) and earnings before tax were NOK 310 million (340 million). This corresponds to a profit margin of 7.2% (11.8%). 
AF Gruppen's revenues in 2017 were NOK 13,704 million (11,876 million). Preliminary profit before tax was NOK 935 million (NOK 1 040 million), corresponding to a profit margin of 6.8 per cent (8.8 per cent).
A good order intake in 2017 resulted in an order backlog of NOK 19,773 million (15 332 million) at year-end.  

The construction market in Norway is good with a wide selection of projects. In 2017 Civil Engineering started a large number of new projects, but nevertheless delivered a healthy result. Civil Engineering saw revenues of NOK 4,478 million (3 368 million) in 2017, with corresponding pre-tax earnings of NOK 311 million (475 million).  Building has had significant growth in revenues and achieved a good result with some regional differences. Revenue in 2017 finished at NOK 8,041 million (6 688 million) with pre-tax earnings of NOK 493 million (498 million). Property has a high level of activity and numerous projects under construction. This provided a good result for 2017. A cautious housing market is impacting the number of new building starts, and is slowing down the sales rate for new homes. Property reported earnings before tax of NOK 75 million (30 million) in 2017.

The market is good for both Environment and Energy. Both business areas reported good results for 2017 and have a healthy order backlog. Environment reported revenues of NOK 601 million (729 million) and earnings before tax of NOK 45 million (42 million) in 2017. Energy reported revenues of NOK 244 million (177 million) earnings before tax of NOK 22 million (16 million) in 2017. 

Low oil prices throughout 2017 have resulted in a challenging market for oil-related business. The market for the removal and recycling of oil platforms is characterized by strong competition and few demolition projects for 2018 and 2019. Offshore nevertheless reported a good result for 2017. Revenues for 2017 amounted to NOK 664 million (1 014 million) and earnings before tax amounted to NOK 49 million (94 million).

AF Gruppen is in a very strong financial position. Net operating cash flow was NOK 325 million (306 million) in Q4 and NOK 1 354 million (822 million) in 2017. As at 31 December 2017, AF Gruppen had net interest-bearing receivables of NOK 1,210 million (606 million). The Board of Directors has proposed a divided of NOK 5.00 (5.00) per share for the first half of 2018.

AF imposes the same strict requirements on all its partners and suppliers as on its own employees.  Figures from the subcontractors are included in the injury statistics. The LTI rate for the fourth quarter was 1.1 (0.8). For 2017, the LTI rate was 1.1 (1.3). 

AF works systematically to avoid work-related absence. The goal is overall sickness absence of less than 3.0 per cent. Sickness absence in Q4 was 3.0% (3.8 %), and for 2017 it was 3.0% (3.7%). 

'AF Gruppen continues to grow and is delivering good results in all business areas. Our healthy financial position and the order intake is a good point of departure to achieve the goals of the growth strategy. In order to enable growth in Sweden, all Swedish activities will be gathered in a common business area with clear organization and management. The financial reporting will changed correspondingly as of the first quarter of 2018. For 2017 revenues in Sweden were NOK 1.5 billion and earnings before tax NOK 67 million.' 

'It's inspiring to see that in a year with strong growth, we achieve both sound financial results and ensure the health and well-being of our employees. The year's employee survey shows record-high satisfaction with AF Gruppen as an employer. This is a competitive advantage, and attracts both talented executives and skilled workers. Growth gives the employees new opportunities and challenges, and is over time an important factor in employee development. This allows us to create a competitive AF.' 

'Clear core values and systematic work on risk management and health, safety and the environment is a part of AF's culture and will continue to govern our choices. It's pleasing to see that we have record-low sick leave for 2017, which is well below the average of the industry.' 

'We have a very good point of departure for 2018, and are on course to achieve our ambition of profitably growing to revenues of NOK 20 billion in 2020,' says CEO Morten Grongstad of AF Gruppen.


For further information:
Morten Grongstad, CEO, mobile +47 991 53 905
Sverre Hærem, CFO, mobile +47 952 45 167
Wibecke Brusdal, Director Corporate Communications, mobile +47 930 93 150

www.afgruppen.com