News

12. May 2011

Nordecon posts improved year-on-year results for Q1

Although Nordecon AS ended Q1 2011 with a gross loss of 73,000 euros, its financial indicators are showing signs of improvement compared to the same period in 2010.

Although Nordecon AS ended Q1 2011 with a gross loss of 73,000 euros, its financial indicators are showing signs of improvement compared to the same period in 2010. The group’s sales revenue was 17.7 million euros – a rise of 58% year-on-year.

“If we compare it to the same period last year, our operating loss for Q1 2011 was much lower, and in terms of our main areas of activity we essentially broke even,” explained Jaano Vink, chairman of the management board of Nordecon AS. “Looking at it from that angle we’re pretty satisfied with the results. That said, we’re still dealing with losses overall, and our efforts to get us back into the black are ongoing. Profit’s not something a construction company returns to though in one huge bound – you get there a little at a time, and it’s definitely the direction we’re heading in. It’s reassuring that the news we post from here on in should all be much more positive!”

Vink says that a second consecutive snowbound winter left its mark on the group’s coffers during the first few months of the year, since it affected work on outdoor sites and led to losses in road maintenance contracts. The key words for spring in the construction field are extended payment terms and the dictate of clients in establishing the terms and conditions of contracts. “And in spite of all this we still managed to boost our revenue, which was helped by the decisions made mid-last year for the restructuring of the group and improving the efficiency of our operations,” he said. Increased sales revenue was also supported in Q1 by moderate growth in buildings and successful bids in projects in the field, in which work was able to be carried out during winter.

Vink says that although the construction field has come through the worst of the recession, no one expects to see major recovery this year. “It will take time for companies that had to make cutbacks to bounce back from the crisis and regain the position they held before, and it probably won’t be until 2012 that we see more stable growth on the construction market. Competition is easing off in certain segments – in some cases because of bankruptcy, but mostly because the cuts that were made during the recession in terms of human and financial and other resources are starting to restrict what companies can do. All of that’s having an effect on their ability to bid in tenders. And when there’s less competition, the profit margins on contracts are better.”

Talking about Nordecon’s plans for spring, Vink said: “It’s going well for us, so far – we’ve won some new contracts on some interesting and pretty large-scale projects, in both road and building construction. The biggest ones we’ve won recently are the construction of the Aruvalle-Kose section of road and the next stage of the construction of Ämari air base. They’ll be keeping all of our units busy!”