Turnover for the 1st quarter was NOK 6,209 million (6,607 million) and profit before tax amounted to NOK 245 million (206 million). This corresponds to a profit margin of 4.0 per cent (3.1 per cent). A high order intake resulted in an order backlog of NOK 33 818 million (32,492) at the end of the quarter.
AF Gruppen is in a very strong financial position. Cash flow from operating activities was NOK 205 million (499 million) for the 1st quarter of 2021. As at 31 March 2021, AF Gruppen had net interest-bearing receivables of NOK 46 million (52). Earnings per share for the quarter were NOK 1.55 (NOK 1.23). The Board proposed to the general meeting of shareholders a dividend of NOK 6.50 (6.00) per share for distribution during the first half of 2021.
"Good operations and sound project activities mean that we achieved acceptable results at the beginning of 2021. Throughout the quarter we have experienced high demand and a good influx of new, exciting projects. A strong order backlog gives us a high degree of predictability. At the same time, there has been a certain amount of variation between our units and we will continue to work to ensure that all units deliver at the expected levels," says Amund Tøftum, CEO of AF Gruppen.
AF imposes the same strict requirements on all its partners and suppliers as it does on its own employees. Figures received from subcontractors are included in the injury statistics. The LTI-1 rate for Q1 was 1.5 (1.6).
AF works in a systematic and targeted manner in order to avoid work-related absence. Absence from work due to sickness for Q1 was 5.2% (5.0 %). Compared to previous periods, part of this increase was due to the ongoing infection situation. The Covid-19 outbreak and associated restrictions are creating challenges and having an impact on all projects, but most projects have still managed to maintain satisfactory operations during the quarter.
At AF, everyone is equally valuable, and the company aims to have an inclusive, safe working environment with zero tolerance for discrimination and a culture where any violations have consequences. Since 2018 AF has been working on a diversity project entitled “The Best People”, and the “Of Equal Value” campaign has been launched as part of this project. This campaign has been well received by our units and has resulted in a high level of involvement.
AF has a special responsibility in those areas where society's challenges can be related to the company’s operations. The UN Sustainable Development Goals (SDGs) outline the world's challenges and needs, and AF's social responsibility is linked to the UN Sustainable Development Goals by ensuring that the company will be a responsible player and undertake its own projects in a sustainable manner, and will also continue to develop its service spectrum. Climate and the environment is a separate initiative in AF's corporate strategy.
“Climate and the environment is one of our four strategic initiatives for the current strategy period. We want to reduce the relative carbon footprint created by AF Gruppen's operations. Our goal is to halve greenhouse gas emissions and the amount of waste that cannot be reused or recycled for each business area by 2030, taking turnover into consideration. This is a natural part of our corporate social responsibility and entails new, exciting business opportunities. We will continue to seek out such opportunities, and we are well equipped to meet new customer demands and any changes in pace in the industry," says Mr. Tøftum.
Selected highlights from the quarter:
- The construction market in Norway is characterised as being good and not particularly sensitive to cyclical fluctuations. The level of activities in Civil Engineering increased considerably compared to the same quarter in 2020, and this business area delivered good results during the quarter. Since 2021, Eiqon and Consolvo have become part of Civil Engineering, something that is reflected in the comparative figures. AF Anlegg currently has two ongoing major projects in progress: E39 Kristiansand vest–Mandal øst and Bergtunnlar Lovö in Stockholm.
- Turnover for Construction has fallen slightly compared to the same period last year, and profitability is somewhat weaker than expected for the quarter. Covid-19 has created challenges in several projects, especially due to quarantine and entry regulations. During the quarter, 11 new agreements were reported to the stock exchange and our order backlog increased during the period to NOK 12,041 million (9,798) as at 31 March 2021.
- As expected, the margins for Betonmast are lower than for AF Gruppen's other operations. However, Betonmast delivered lower profitability during the first quarter than during the same quarter last year. There was a great deal of variation in the profits of our various units in Norway. Organisational changes have been implemented during the quarter at Betonmast Boligbygg. Betonmast's Swedish operations delivered turnover and profitability on a par with last year.
- From the beginning of the year, Property has been divided into two operating units, AF Eiendom and LAB Eiendom, to ensure increased local anchorage in Stor-Oslo and the Bergen region respectively. Property enjoyed good sales during the quarter, especially in respect of the Fyrstikkbakken project for AF Eiendom.There were four residential property projects in the production stage at the end of the quarter. A total of 558 units are involved in these projects, and of these AF’s share is 209. The sales ratio for commenced projects is 87%.
- Energy and Environment increased its activity levels and profitability for the quarter. The foundation for our environmental activities is that to a large extent waste can be reused, and thus be a valuable resource in a growing circular economy.
- AF’s Swedish operations in respect of civil engineering, building, property and demolition are combined in the Sweden business area. Sweden maintained stable profitability, even though the level of activities has decreased compared to the 1st quarter last year.
- In the Offshore business area, turnover increased compared to the first quarter of last year and profitability was good, with an operating margin of 4.9% during the quarter. AF Offshore Decom, which dismantles and facilitates the recycling of offshore installations, has a higher level of activity and has significantly improved profitability compared to the corresponding quarter in 2020.