High activity and improved performance in Q3

AF Gruppen's revenue amounted to NOK 7,204 million (6,907 million) in the third quarter and NOK 22,043 million (22,152 million) for the year to date. Profit before tax amounted to NOK 289 million (103 million) for the third quarter and NOK 496 million (408 million) for the year to date. This represents a profit margin of 4.0% (1.5%) for the third quarter and 2.2% (1.8%) for the year to date. The total order backlog amounted to NOK 36,442 million (41,864 million) at the end of the quarter. Contracts worth NOK 11,727 million were reported to the stock exchange after the end of the quarter.

AF Gruppen has a strong financial position. Cash flow from operating activities amounted to NOK 348 million (494 million) in the third quarter of 2024. Net operating cash flow amounted to NOK 1,137 million (697 million) for the year to date. As of 30 September 2024, AF Gruppen had net interest-bearing debt of NOK 780 million (1,381 million). Earnings per share for the quarter were NOK 1.85 (0.43).

“AF Gruppen delivered a stable quarter, with strong performances in several business areas. The Group’s revenue increased in the quarter, and Civil Engineering achieved revenue growth of 40% compared with the corresponding quarter in 2023. Energy and Environment also delivered strong results, and the positive trend in safety work continued,” says Amund Tøftum, CEO of AF Gruppen.

AF imposes the same strict safety requirements on all its partners and suppliers as it does on its own employees. Figures from subcontractors are included in the injury statistics. The
LTI-1 rate for the third quarter was 0.5 (0.0). The LTI-1 rate for the year to date is 0.5 (0.8).

AF takes a systematic and targeted approach to avoiding work-related absences. The sickness absence rate was 3.8% (3.9%) for the third quarter. The sickness absence rate for the year to date is 4.0% (4.1%).

“The construction industry uses a variety of input factors, with concrete being central to all our construction and civil engineering projects. Concrete is one of the most widely used construction materials in the world, and Norway is a pioneer within the development of robust concrete. Over time, AF Gruppen has built up strong specialist environments within this segment, and we are experiencing increased demand for both expertise and capacity. A significant effort is being made to develop increasingly eco-friendly solutions, both to cut costs and to cut greenhouse gas emissions,” says Tøftum.

 

Selected highlights from the quarter:

• The Civil Engineering business area saw a high level of activity in the third quarter with revenue growth of 40% compared with the same quarter last year. AF Anlegg saw a high level of activity and delivered a good result for the quarter. AF Anlegg has a solid project portfolio with several major projects in production, and in general there is a consistently high level of activity and good operational performance in the projects. Målselv Maskin & Transport, VSP and Stenseth & RS reported very good profitability in the third quarter.
• The Construction business area reported revenue decrease of 12% compared with the same quarter last year. AF Bygg Østfold, Strøm Gundersen, Haga & Berg and ÅBF delivered very good results for the third quarter. AF Byggfornyelse delivered a good result. The order backlog in Construction increased in the quarter.
• Betonmast’s activity was on a par with the same quarter last year, and profitability improved in the quarter. Betonmast Asker og Bærum delivered a very good result for the quarter. The Betonmast Trøndelag, Røsand, Innlandet, Buskerud-Vestfold and Østfold units delivered good results for the quarter.
• A challenging property market with high interest rates and uncertain market sentiment continued to contribute to low sales figures for Property in the third quarter.  Sales contracts for 22 (5) homes were signed in the quarter, of which AF’s share is 11 (2). In the third quarter, a total of 179 homes were handed over, mainly in the Skårersletta MIDT, Bekkestua Have and Rolvsrud Arena projects. A total of 368 units are in production, of which AF’s share amounts to 184. The sales ratio for commenced projects is 63%.
• Energy and Environment saw revenue on a par with the same quarter last year and delivered a good result. AF Energi saw significantly increased levels of activity compared with the same quarter last year, and high activity and good operations in several projects ensured a good result for the third quarter. AF Decom delivered a good result.
• The results in the Sweden business area still vary greatly. AF Prefab in Mälardalen reported very good results in the third quarter. Kanonaden and HMB delivered good results for the quarter. The former Betonmast Sweden companies had negative results also this quarter.
• Offshore increased its revenue compared with the same quarter last year. Aeron increased its level of activity significantly compared with the same quarter last year and delivered a good result for the quarter. AF Offshore Decom, which dismantles and facilitates the recovery of offshore installations, maintained a level of activity on a par with the same quarter last year and delivered a weak result for the quarter.