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| BAM reports continued margin pressure; 2014 year of stabilisation Nico de Vries, Chairman of the Executive Board of Royal BAM Group said that total revenue grew by 10% in the first quarter of 2014 compared to the first quarter of 2013, driven by more working days in Civil engineering due to the mild winter and by commercial property disposals. The sector results were mixed. The lower sector results at Construction and M&E services and Civil engineering related to older orders and shortfall in overhead recovery in the Netherlands. The profit in Property was due to successful commercial property divestments. PPP had another solid quarter. At Construction and M&E services, revenue fell by €32 million (-5%), mainly due to lower nonresidential activities in the Netherlands. There was a negative result in the Netherlands related to some orders booked under very difficult market circumstances. Performance in the other home markets was broadly stable. The overall order book was down slightly, although the Dutch order book increased. Revenue at Civil engineering was up by €66 million (8%) in total. This was driven by the mild winter conditions after the harsh winter a year earlier. Revenues were up in all home markets except Germany which was slightly down; international sales were down due to order phasing. As in Construction and M&E services, there was a negative result in the Netherlands related to older orders. The order books in Belgium, Ireland and Germany declined due to progress on large projects; there were positive book-to-bill ratios in the Netherlands and the UK. In Property, the higher first quarter revenue and result were caused by commercial property divestments, mainly in Belgium. BAM sold 444 homes in the Netherlands in Q1 2014 versus 265 in Q1 2013 (note: that quarter was impacted by changes to tax rules) with a rise in the proportion of retail buyers. Overall volumes of new house sales remain low in historic terms, but there are green shoots in some parts of the Netherlands. Conditions in Dutch commercial property have not worsened in 2014, but the macro economic outlook is subdued and consumers remain cautious. At PPP, the positive result reflected the transfer of four projects to the joint venture with PGGM. BAM expects to transfer another two projects to the joint venture before the end of 2014. The bid pipeline remains healthy. write your comments about the article :: © 2014 Construction News :: home page |