BAM reports adjusted pre-tax result of €93.6 million
Rob van Wingerden, CEO of Royal BAM Group:
'The market trends of the first half year continued in the third quarter of 2018, in line with our expectations. Construction and Property is having a strong year especially due to its leading position in the Dutch residential property market. The overall result at Civil engineering was break-even; the good performance in the UK, Germany and Ireland - with margins well within the strategic target range - was offset by the Netherlands, BAM International and Belgium. Our PPP business delivered a solid result, ahead of last year.'
Construction and property delivered strong results, led by the Netherlands residential construction and property activities. Dutch house sales, predominantly to private buyers, rose by 11% to 1, 862. The property impairment mainly related to a Dutch regional land position adjacent to the development of a large windmill park, which is now reduced to the value of farmer's land.
At Civil engineering, there was a break-even result for the first nine months. This included the cost overrun of €30 million at the sea lock IJmuiden already reported in the first half year results. The immersing of the first caisson is nearing completion. Dutch civil engineering was profitable in the third quarter. The performance in the first nine months of BAM International and in Belgium reflected challenging market conditions; these markets are showing signs of improvement.
In PPP, there was a good result from the portfolio and a gain on the transfer of one project to the joint venture with PGGM in the first quarter. The project pipeline remains healthy.
The trade working capital efficiency ratio was -9.4 per cent at end-September 2018. This rolling metric is expected to worsen in the fourth quarter due to the strong trade working capital level at year end 2017 and the cash outflow on sea lock IJmuiden this year. BAM still expects a negative cashflow for the full year 2018. BAM's management has revitalised the trade working capital programme, with a heightened focus on work in progress, trade receivables and settling final accounts.
There was a cash outflow on the sea lock IJmuiden of €80 million in the first nine months of 2018 (first nine months of 2017: cash out €3 million). Constructive discussions are ongoing with the banking syndicate for this project to update the financing scheme and restart funding. At this stage it is not clear when these discussions will be finalised.
Royal BAM Group nv is a construction company with ten operating companies, active in Construction and Property, Civil engineering, as well as in Public-private partnerships. BAM has leading positions in five European home markets: the Netherlands, Belgium, the United Kingdom, Ireland and Germany.
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