AF Gruppen reports improvement in profits and strong order backlog for the first quarter

First quarter revenues amounted to NOK 7,129 million (7,187 million). Profit before tax amounted to NOK 214 million (186 million) for the first quarter. This represents a profit margin of 3.0 per cent (2.6 per cent). AF Gruppen had an order backlog of NOK 44,232 million (40,275 million) at the end of the quarter. 

“AF Gruppen has improved its profit compared with last year, has a strong order backlog and a good cash flow in the quarter. We have improved profitability in several business areas, although the profit was weakened by approx. NOK 100 million in accrued shutdown and termination costs in the Civil Engineering business area,” says Amund Tøftum, CEO of AF Gruppen.

“In February, the Swedish Transport Administration terminated its contract with AF Anläggning AB for the E4 Förbifart Stockholm project. We strongly disagree with the claims made by the Swedish Transport Administration and are disputing the termination. AF will claim compensation for any loss we suffer. AF Anläggning AB is expected to be weakly positioned to receive new assignments in Sweden while the dispute is ongoing,” says Tøftum.

AF Gruppen is in a strong financial position. Cash flow from operating activities was NOK 330 million (128 million) for the first quarter of 2025. As at 31 March 2025, AF Gruppen had net interest-bearing receivables of NOK 290 million (-974 million). Earnings per share for the quarter were NOK 1.27 (1.30).

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 0.9 (0.8). The company takes a targeted and systematic approach to preventing work-related absences, and the absence due to illness rate for the first quarter was 4.8 per cent (4.5 per cent).

The company recently presented its corporate strategy for the period 2025-2028.

“Together, we will continue to clear up the past, and build for the future. In the period up to 2028, we will work safely and profitably, while halving our climate and environmental footprint,” says Tøftum. 

Selected highlights from the quarter:

• Civil Engineering had a high level of activity in the first quarter with revenue growth of 16 per cent compared with the same quarter last year but delivered a result below expectations for the quarter. The result was affected by approx. NOK 100 million in shutdown and termination costs due to the Swedish Transport Administration’s termination of the contract for the E4 Förbifart Stockholm project. AF has disputed the termination. The remaining project portfolio, which consists of several major production projects, maintains high activity and strong operations during the quarter. Målselv Maskin & Transport reported very good profitability in the first quarter. Stenseth and RS also had good results in the quarter. Eiqon and VSP experienced weak results in the first quarter of the year.
• Construction had a slight reduction in activity, but delivered greater profitability compared with the same quarter last year. AF Byggfornyelse, AF Bygg Østfold, Strøm Gundersen Vestfold, and ÅBF delivered strong results in the first quarter. Haga & Berg and LAB Entreprenør delivered results that were somewhat below expectations. Strøm Gundersen and HTB delivered results below expectations. AF Bygg Oslo, AF Håndverk and FAS had weak results during this quarter.
• Betonmast delivered a significant improvement in profitability in the first quarter, with a stable level of activity compared with the corresponding quarter last year. The Betonmast Oslo, Buskerud-Vestfold, Røsand, Innlandet and Østfold units delivered good results for the quarter. Betonmast Trøndelag and Asker og Bærum delivered slightly below expectations, while Betonmast Romerike and Boligbygg had weak results in the quarter.
• Property is experiencing a demanding real estate market with high interest rates and uncertain market sentiment. This contributed to continued low sales in the first quarter. Sales contracts for 25 (19) homes were signed in the quarter, of which AF’s share is 11 (8). One residential property project was in production at the end of the quarter: Rolvsrud Arena in Lørenskog. The project has 95 residential units in production. Sales contracts have been signed for 32 of them. This resulted in a sales ratio for commenced projects of 34 per cent.
• Energy & Environment reported revenue growth of 8 per cent in the first quarter compared with the same quarter last year, and an operating margin of 5.0 per cent. AF Decom maintained its revenue in the first quarter and delivered a result slightly below expectations. The Environmental Centres contributed with an very good result in the quarter. AF Energi significantly increased its level of activity compared to the same quarter last year. Profitability is somewhat below expectations in the first quarter.
• AF’s Swedish activities within civil engineering, construction, property and demolition are all gathered under the business area Sweden. Sweden had a 29 per cent decrease in revenue compared with the same quarter last year, and a significant improvement in profitability. Kanonaden and AF Prefab in Mälardalen reported very good results in the quarter. HMB delivered slightly below expectations, while AF Härnösand Byggreturer, AF Bygg Syd, AF Bygg Öst, and AF Bygg Väst had weak results in the first quarter.
• Offshore had less activity than in the same quarter last year. Aeron had substantial revenue growth compared with the same quarter last year and delivered a good result for the quarter. AF Offshore Decom saw a lower level of activity in the first quarter compared with the same quarter last year and delivered a weak result for the quarter.