AF Gruppen with improvement in profits for the first quarter

Revenue for the first quarter was NOK 7,187 million (7,393 million). Earnings before tax were NOK 186 million (13 million) in the first quarter. This corresponds to a profit margin of 2.6 % (0.2%). AF Gruppen had an order backlog of NOK 40,275 million (41,668 million) at the end of the quarter. 

“AF Gruppen improves the profit compared to last year, but we are not satisfied with the overall profitability of the group. We delivered good results in Civil Engineering and Energy and Environment. The order backlog maintains at a high level considering the current market situation,” says Amund Tøftum, CEO of AF Gruppen.

AF Gruppen is in a strong financial position. Cash flow from operating activities was NOK 128 million (-24 million) for the 1st quarter of 2024. As at 31 March 2024, AF Gruppen had net interest-bearing liabilities of NOK 974 million (570 million). Earnings per share for the quarter were NOK 1.30 (-0.03). The Board proposed to the General Meeting of shareholders a dividend of NOK 3.50 (6.50) per share for distribution during the first half of 2024.

AF imposes the same strict safety requirements on all its partners and suppliers as it does on its own employees. Everyone should arrive home safely from our projects, and figures from subcontractors are included in the injury statistics. The LTI rate for the first quarter was 0.8 (1.4). The company works systematically and in a targeted manner to avoid work-related absences, and the sick leave rate for the first quarter was 4.5% (4.4%).

“Society has very ambitious goals for reducing energy consumption up to 2030. AF Gruppen delivers solutions that reduce overall energy consumption and increase the proportion of energy from renewable sources. We are a total supplier offering services ranging from consulting, prefabrication and installation to operation of solutions for buildings and industry. In addition, we have built up a portfolio of central energy plants. We see increasing demand for energy services and AF Energi has had a growth in revenue of more than 30% in the past year,” says Tøftum.

Selected highlights from the quarter:

• AF Anlegg had a high level of activity and good profitability in the 1st quarter. The civil engineering business had significant growth of 41% compared to the same quarter last year. AF Anlegg had record-high revenues during the quarter and delivered good results in the 1st quarter, with solid profit contributions from several projects. AF Anlegg has several major projects in production, and in general there is a high level of activity and good operational performance in the projects.  Målselv Maskin & Transport and Stenseth & RS reported good results for the 1st quarter.
• Construction had a reduced level of activity, but delivered increased profitability compared to the same quarter last year. AF Bygg Østfold delivered very good results in the 1st quarter. AF Byggfornyelse, Haga & Berg, Strøm Gundersen, Strøm Gundersen Vestfold, HTB and ÅBF delivered good results.
• Betonmast had a negative result in the 1st quarter, and a lower level of activity compared to the same quarter last year. The Betonmast Røsand and Østfold units delivered good results for the quarter. Betonmast Buskerud-Vestfold and Innlandet delivered results somewhat below expectations. Betonmast Oslo, Trøndelag and Boligbygg had weak results in the quarter.
• Property had low sales in the quarter due to a challenging property market. Sales contracts for 19 (20) homes were signed in the quarter, of which AF’s share is 8 (9). In the first quarter, a total of 103 homes were handed over. There were three residential property projects in the production stage at the end of the quarter. A total of 735 units are in production, of which AF’s share is 319. The sales ratio for commenced projects is 70%.
• Energy and Environment had revenue growth of 18% in the first quarter compared with the same quarter last year, and delivered good profitability. AF Energi has significantly increased its level of activity compared to the same quarter last year. A high level of activity and good operational performance in the projects resulted in a good result for the 1st quarter.  AF Decom had revenue growth in the 1st quarter compared with the same quarter last year, but had a result somewhat below expectations for the quarter.
• AF’s Swedish activities within civil engineering, construction, property and demolition have been gathered in the Swedish business area. Sweden had a decline in revenues of 29% compared to the same quarter last year, and a profit before tax of zero. AF Prefab i Mälardalen delivered very good results in the 1st quarter and Kanonaden delivered good results in the first quarter. The former Betonmast Sweden units have negative results this quarter also.
• Offshore has increased its level of activity compared to the same quarter last year. Aeron maintained a high level of activity and reported good profitability for the quarter. AF Offshore Decom had higher revenues than the corresponding quarter last year, related to several offshore campaigns completed during the quarter. Overall, the unit delivered a weak result for the quarter.