Operating profit before special items improved again in the third quarter, confirming expectations of a gradual improvement in earnings during the year.
Summary – Interim financial report for the third quarter of 2020
As expected, revenue for the first nine months of DKK 4,378 million decreased by approx. 5% on the same period last year. This mainly reflected a temporary decline in revenue at Enemærke & Petersen in the first half of 2020.
Third-quarter revenue increased 1% to DKK 1,497 million, mainly due to Scandi Byg.
Operating profit before special items for the first nine months increased to DKK 82 million in the MT Højgaard Group and DKK 51 million in MT Højgaard Holding A/S. The MT Højgaard Group’s operating margin before special items increased to 1.9% from 1.4% in the same quarter in 2019, mainly driven by a higher gross margin and lower administrative expenses.
The MT Højgaard Group’s third-quarter operating margin before special items increased to 2.6% from 1.5% in the same quarter in 2019.
Special items amounting to an expense of DKK 31 million were incurred in the third quarter for redundancy payments for employees and managers and write-down of a lease asset (Søborg head office).
The MT Højgaard Group’s cash flows from operating activities were an inflow of DKK 134 million in the first nine months compared to an outflow of DKK 148 million in the same period last year. Operating cash flows benefited from extended payment deadlines for A-tax (tax deducted from income at source), labour market contributions and VAT. MT Højgaard Holding A/S’s cash flows from operating activities were an inflow of DKK 115 million compared to an outflow of DKK 45 million last year.
Order intake in the first nine months was DKK 4,569 million, up 7% on the same period last year. The increase mainly reflected high order intake at Enemærke & Petersen.
The Group’s total order book had increased to DKK 6.8 billion at the end of the third quarter from DKK 6.2 billion at the end of the third quarter of 2019 and DKK 6.6 billion at the end of 2019.
At the start of October, MT Højgaard Danmark won a conditional order with a potential value of DKK 1.6 billion.
As part of the organisational changes of 1 October 2020, MT Højgaard Danmark has closed its Design & Engineering department and is thus no longer providing consulting engineering services. Instead MT Højgaard Danmark will intensify collaboration and trading with external consultants.
Lindpro A/S, which was sold on 31 March 2020, has been accounted for as a discontinued operation. Except for balance sheet and cash flows, all comparative figures for 2019 have been restated to reflect the effect of the sale.
Unchanged outlook for 2020
The outlook for 2020 is reaffirmed despite continued great uncertainty in the market caused by the repercussions of the Covid-19 pandemic:
The MT Højgaard Group reaffirms the outlook of revenue of around DKK 5.9 billion and operating profit before special items of around DKK 125 million.
MT Højgaard Holding A/S reaffirms the outlook of revenue of around DKK 5.9 billion and operating profit before special items of around DKK 85 million.
MT Højgaard Holding A/S and the MT Højgaard Group remain focused on positive cash flows on all projects.
- We have had a sound third quarter with good progress on our strategic efforts in the areas of collaboration and sustainability and we have reduced risks by closing a number of disputes. We are on track in terms of results – we are gradually improving earnings before special items and we expect to make further progress in the fourth quarter. Due to Covid-19 there is still great uncertainty in the market, but we are beginning to see momentum in demand from public customers and the social housing sector, especially in refurbishment, and the pipeline has improved throughout the Group in the third quarter, says President and CEO Morten Hansen, MT Højgaard Holding A/S.
CEO Morten Hansen and CFO Martin Solberg can be contacted on telephone +45 22 70 93 65.