DESTIA´S INTERIM REPORT JANUARY-SEPTEMBER 2011: Improvement of core operations progressing, cash flow strengthened
- Turnover declined as forecast in comparison with the previous year.
- The downturn in the operating result stemmed from both a fall in turnover and a weakening in individual projects.
- Cash flow was significantly better than in the previous year.
- The value of the order book remains at a strong level.
- Destia’s Board of Directors approved the company’s strategic updates and the targets for the strategic period 2012–2014.
- The turnover of the Destia Group in 2011 will be lower than in the previous year, and it is forecast that the operating result will remain negative.
|Profit/loss for the period||Me||-10,1||4,6||5,2||11,1||8,3|
|Profit/loss for the period||%||-2,9||
President & CEO Hannu Leinonen comments on the report period:
“Destia Group’s turnover for the third quarter of the year was lower than for the corresponding period in the previous year. In large projects, the main focus of demand has continued to be in subterranean rock construction, which still constitutes a minor share of Destia’s business. The market also contains many small civil engineering contracts. Next year, the revival of the infrastructure construction market will be supported by the start-up of major government road projects; however, at the same time, private-sector activity will be overshadowed by uncertainty about the state of the financial market.
The multiplicative effects of the weakening in Norwegian projects and individual track and rock construction projects that took place mainly during the second quarter of the year caused profitability to be weaker than in the previous year. A weakening in projects arose from track operations in the third quarter too. In other respects, business has developed as planned.
The key elements of Destia’s strategy for 2011─2014 approved by the Board are the improvement of operational profitability and the strengthening of the company’s position in core business operations. During the current year, assessment of project tenders for the identification of project risks at the bidding stage, the uniformity of working practices and the smooth operation of support services have been improved via individual development programmes.
Destia’s existing order book and previously initiated measures aimed at improving profitability will positively affect the prospects for this year. The profitability of core business projects has also improved on average. The turnover of the Destia Group in 2011 will be lower than in the previous year, and it is forecast that the operating result will remain negative on account of the loss-yielding projects.”
Further information: President &CEO Hannu Leinonen, tel. +358 20 444 4000, and CFO Pirkko Salminen, tel. +358 50 3022 485
Destia Group’s financial statements for 2011 shall be published on 29 February 2012.