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SOURCE Ballast Nedam
NIEUWEGEIN, The Netherlands, October 25, 2013 /PRNewswire/ --
Construction and infrastructure markets were under sustained pressure. As a consequence, competition and price pressure have continued to increase. We expect this situation to persist for some time.
The third-quarter results were disappointing. Unfavourable results were achieved on a major project and several regional infrastructure projects. These had started before the restructuring of the regional infrastructure companies concerned that was set in motion at the end of last year. The risk profile has also increased because of uncertainty surrounding substantial additional work on a major project. There were also substantial losses at two specialized companies.
The regional construction companies, the specialized companies and the head office will be further reorganized in the fourth quarter, with the loss of some 250 jobs, and a reorganization expense of approximately € 7 million. Management changes have been made in the regional construction companies and specialized companies.
The order book grew in the third quarter from € 1 567 million at half year to € 1 630 million, because of the Zaanstad Penitentiary PPP project, the E and F piers at Schiphol Amsterdam Airport, the development of (Y)ours Leiden, and 157 newly built homes in Amsterdam.
The Pi2 consortium, a joint undertaking of Ballast Nedam (65%) and Royal Imtech (35%), reached financial close for the Zaanstad Penitentiary PPP project. Pi2 is responsible under the DBFMO contract with the Government Buildings Agency for the design, new construction, financing, maintenance and technical facilities management for a 25-year period after the penitentiary becomes available. Financial close was also reached for the work for Schiphol Amsterdam Airport's transition to central security. Ballast Nedam is constructing an overlay on the E and F piers and a terminal extension between these.
Phase 1B of (Y)ours Leiden consists of 117 starters' apartments, 60 of which are for rent and 57 owner-occupied. More than 90% of the owner-occupied homes have been sold. VORM Ontwikkeling, Ballast Nedam and Syntrus Achmea Real Estate & Finance are developing and constructing (Y)ours Leiden, the most sustainable student campus in Europe, with 1900 student apartments, 205 starters' homes, and associated facilities.
On behalf of the Ymere housing association, two of the five apartment buildings on Tugelaweg in Amsterdam-Oost are being replaced by mixed new building. The 157 newly built homes are a combination of 85 social housing units, 33 for market rent, and 39 owner-occupied.
Not yet included in the order book is the integrated performance contract for the operational management and maintenance of all dry infrastructure for the Port of Rotterdam for a five-year period, which Ballast Nedam won in the third quarter. Student accommodation organization DUWO has recently opted for modular construction for the final phase of the Uilenstede campus redevelopment and new construction in Amstelveen. The building of 233 new homes will have exactly the same appearance as the other new campus buildings. Modular building up to eleven floors is a first for Ursem Modular Building Systems.
The net financing position comprised a debt position of € 116 million, which includes net cash of € 44 million. The debt position at half year was € 124 million. The financing requirement is higher in the course of a year than at year-end.
The sale of the raw material company Yvoir was completed in July. This sale is in line with Ballast Nedam's objective to improve the financial position. Negotiations are ongoing regarding the sale of the interest in the raw material company Beheermaatschappij Bontrup. Agreement on terms has yet to be reached with Remex Mineralstoff, which had made a non-binding bid for Feniks Recycling.
Disregarding the results of disposals, we expect an operating loss for the full year 2013 because of the disappointing results at several companies and the ongoing reorganizations. We refrain from further quantification of the forecast in view of the persistent uncertainty surrounding substantial additional work on a major project and the completion of disposals in 2013. In the half-year update we issued a forecast for the full year 2013 of an operating profit of approximately € 15 million.
Ballast Nedam engages in integrated projects in The Netherlands in four areas of work: housing, mobility, energy and nature. Within this area we focus on the niche markets: industrial construction, offshore wind turbines, secondary raw materials and alternative fuels. In a number of areas of expertise, we also operate internationally. The Ballast Nedam share is included in the Amsterdam Small Cap Index (AScX) of NYSE Euronext.
Ballast Nedam's approach is based on life cycle thinking and acting: we develop, construct, manage and recycle. We are involved in long-term management, maintenance and operation of projects and organize financial feasibility. Our supply and specialized companies deliver competitive edge through innovation, cost leadership and purchasing strength. Ballast Nedam's range of services is shifting towards modular products and specific product-market combinations with greater added value.
Ballast Nedam creates enduring quality combined with lower life cycle costs for its customers and society. http://www.ballast-nedam.com
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