The sales revenue of Nordecon AS amounted to 22.5 million euros in Q1 of 2012, which is 27% more on the year-over-year basis. The group recorded gross profit of 36,000 euros in Q1, which means year-over-year improvement of approximately 109,000 euros. The volume of the contracts portfolio and continuous rise in the efficiency of the construction activities allows the group to see the remaining year with moderate optimism.
“The results of the first quarter were, in principle, as presumed – nothing surprising or unexpected. This refers to stable movement from the area of influence of the passing crisis in the construction market to a gradually improving operational environment. Construction is a relatively inert business area, where due to the long-term performance of contracts it is quite easy to predict the general trends over a longer period,” said Jaano Vink, Chairman of the Management Board of Nordecon AS. “The year-over-year comparison indicates that, as expected, the performance in our main area of activity has gradually improved, which is logical. As usual, in the first quarter the weather conditions also had a greater impact on the activities of the companies, and less new procurements were published during this period.”
Vink noted that the Nordecon Group continued its consistent efforts towards restoring profitability, and the constant positive impact of the austerity measures implemented from 2010 and the restructuring of work processes was already evident, although in figures it would be clearer with the advancement of ongoing contracts during the year: “We would see the future with moderate optimism.”
The general administrative expenses of the group amounted to 1.23 million euros in Q1, having fallen year-over-year from 6% to 5.5% of the sales revenue. “I am especially pleased to note that our employees’ productivity and the productivity in relation to labour costs increased substantially when compared to the previous year. These indicators improved by 49% and 44%, respectively, when compared to the same period in the previous year,” said Vink.
As of the end of the first quarter of this year, the sales revenue in the segments of buildings and other structures totalled 11.9 million and 10 million euros, respectively. Over the year, the proportion of the segment of other structures is expected to increase. According to Vink, the largest share in the area of buildings was continuously held by the construction of non-residential buildings financed by the public sector, but some recovery could also be noted in office buildings, as well as industrial and warehouse buildings segments. “This year, the gradual return of private customers to the market, in particular with small-volume contracts would continue – this is a positive sign,” added Vink.
As of the end of March, the volume of outstanding work on construction contracts entered into by Nordecon Group companies totalled 136.2 million euros, which is 48% more on the year-over-year basis. Vink says that the state of the contracts portfolio is good and that in addition to large-scale projects that started in the previous year, e.g. the construction of the Aruvalla-Kose intersection, the group has this year, too, signed new large-volume contracts. These include, for instance, the construction of the Centre of Translational Medicine of the University of Tartu, as well as the reconstruction of different intersections of the ring roads located on the border and in the city of Tartu. “Presumably the sales revenue will also continue to rise, but the annual growth would probably still stabilise when compared to that recorded in the first quarter – the market is recovering quietly and no major bounces are forecast for the future.”
