NIEUWEGEIN, the Netherlands, July 22, 2015 /PRNewswire/ --
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- Operating loss of €10 million, including €4 million of restructuring costs, €1 million book profit on disposals and non-recurring income of €3.2 million in respect of earn-out
- Net loss of €15 million (first half 2014: €51 million loss)
- Order book worth €789 million (end-2014: €1026 million)
- Financing position €48 million negative (end-2014: €38 million positive)
- Solvency expected to improve in second half due to rights issue
Update on financial and strategic measures announced in 2015
- Refinancing successfully completed
- Approval of General Meeting of Shareholders for €20 million rights issue in 2015
- Agreements with project partners to reduce interests in major infrastructure projects A15 and A2 are expected to be signed in third quarter of 2015.
- Announcement Public offer Renaissance Construction for issued and outstanding share capital Ballast Nedam
With a separate, jointly press release Renaissance Construction and Ballast Nedam have announced this morning that they have reached conditional agreement on a public offer of Renaissance Construction for all issued and outstanding depositary receipts in the capital of Ballast Nedam. The public offer will be further explained in the press and analyst's meetings scheduled later today.
Key figures
x EUR 1 million first half year 2015 first half year 2014 2014
Revenue 420 515 1166
EBIT -10 -45 -65
Margin (2.4%) (8.7%) (5.6%)
Profit before income tax -15 -50 -69
Profit for the period -15 -51 -103
Order book 789 1188 1026
Shareholders' equity -1 36 11
Solvency 0 0.04 0.02
Financing position -48 -116 38
Ballast Nedam had a loss-making first half-year with a negative operating result (EBIT) of €10 million, including €4 million of restructuring costs, €1 million book profit on the disposals of the interests in the Benelux Secondary PPP fund and the Zaanstad Penitentiary (Pi2) PPP project. The result also includes non-recurring income of €3.2 million in respect of an earn-out fee relating to the sale of Ballast Phoenix Ltd in 2014.
A positive development is that the expected losses on the A15 Maasvlakte-Vaanplein and A2 Maastricht projects did not rise further in the first half of the year from the end-2014 level and that the Infrastructure division faced no further major setbacks in terms of project results. The Erasmus Medical Center project in Rotterdam made a positive contribution during the first half of the year. The negative operating result was caused partly by a loss of €1.4 million on the Nobo Otrobanda Hospital project in Curaçao, in which the divisions Infrastructure and Building & Development participate, and the settlement of the claim on the OVT Breda project amounting to €1.5 million negative. The South and North/West areas of the Building & Development division also recorded disappointing project results. In the Infrastructure division the result was adversely impacted by insufficient coverage of overheads as a result of lower revenue in the first half of the year. The Specialized Companies & Supplies division performed as expected, despite capacity utilization problems in the concrete factories.
Revenue in the first half of 2015 decreased by 18% compared to the first half of 2014 to €420 million, due to lower revenue from the Infrastructure and Specialized Companies & Supplies divisions.
Few new projects were acquired in the domestic market during the past half-year. The Nieuwbouw Erasmus MC construction consortium, a joint venture between Ballast Nedam and BAM, did nevertheless win an additional contract for the final part of the new building for the Erasmus Medisch Centrum. Gebouw RG (the thoracic centre) consists of a basement and a further 11 floors and a gross floor area of approximately 17,500m². This contract has a total value of approximately €40 million. The contracts awarded to the Building & Development division on a final or provisional basis have not yet been entered in the order book.
Solvency decreased to zero. The completion of the rights issue will lead to an improvement in solvency in the second half of 2015.
Refinancing successfully completed
Ballast Nedam completed the formalization of the refinancing on 17 June 2015. The refinancing took place with the cooperation of the banking syndicate consisting of ING Bank, Rabobank, the Royal Bank of Scotland and Sanderink Investments B.V. The financing is subject to three financial covenants which will be measured quarterly from the third quarter of 2015: a guarantee capital floor, a net cash floor and an EBITDA floor.
- Guarantee capital floor: shareholders' equity plus the subordinated loans;
- Net cash floor: own freely available liquid assets netted against the drawn credit facility;
- EBITDA floor: EBITDA corrected for impairments, book profits and losses and restructuring costs.
Approval of General Meeting of Shareholders for €20 million rights issue in 2015
On 29 June 2015 the General Meeting of Shareholders approved the rights issue and an amendment to the articles of association reducing the par value of the shares from €1.00 to €0.01. This reduction is necessary in order to achieve maximum flexibility for the success of the rights issue. Subject to what is stated in the press release on the intended public offer, Ballast Nedam will conduct this rights issue in the second half of 2015, with tradable rights being offered to existing holders of depositary receipts to subscribe for depositary receipts for shares totalling €20 million. Sanderink Investments B.V. will underwrite the rights issue for an amount of €10 million and granted a bridge loan for this purpose in July 2015.
In connection with the intended public offer, the volume underwriting commitment for this rights issue will be extended until 31 December 2015, so this rights issue can still proceed if the intended public offer will not be successful.
Agreements with project partners signed in third quarter of 2015
Ballast Nedam will actively scale back its interests in existing large-scale infrastructure projects to further reduce its risk profile. The transactions announced in April 2015 for the A15 Maasvlakte-Vaanplein and A2Maastricht projects were recently finalized and are expected to be signed in the third quarter of 2015:
- A15 Maasvlakte-Vaanplein project: economic and legal interest reduced from 40% to 10%.
Agreement has been reached with Strukton and Strabag, partners in the A15 Maasvlakte-Vaanplein project, under which Ballast Nedam will reduce its share of the project on signing of the agreement from 40% to 10%. Strukton and Strabag are each increasing their share to 45%. This change will be effective in the second half of 2015. Ballast Nedam will pay €4 million to Strabag and €6 million to Strukton in 2016 as a risk premium. The transaction will have a positive impact of around €13 million on balance on capital and results in the second half of 2015.
- A2 Maastricht project: transfer of infrastructure part to Strukton; transfer of property development to Ballast Nedam.
Agreement has been reached with Strukton, our partner in the A2 Maastricht project, for the takeover of Ballast Nedam's share in the infrastructure activities in the project. Strukton's share in the property development of the A2 Maastricht project will be transferred to Ballast Nedam. Ballast Nedam will pay its share of 50% of the project loss, i.e. €22 million, to Strukton. This payment will be spread over the second half of 2015. Ballast Nedam will acquire the right to the land positions for the property development and on completion of the tunnel will pay approximately €40 million to Strukton, for which external financing will be sought. The transaction will have no impact on assets and results in the second half of 2015.
INFRASTRUCTURE DIVISION
Infrastructure
x EUR 1 million first half year 2015 first half year 2014 2014
Revenue 81 186 458
EBIT -9 -59 -59
Margin (11.1%) (31.7%) (12.9%)
Order book 484 488 559
Assets 93 263 116
The Infrastructure division incurred an operating loss of €9 million. Revenue declined by 56% compared to the first half of 2014 due to lower revenue in industrial construction and the disposal of the offshore activities in 2014. The loss was due to insufficient coverage of overheads as a result of underutilization of capacity. Project losses remained largely limited to a €0.7 million loss on the Nobo Otrobanda Hospital in Curaçao. There was no further rise in the losses on the A15 Maasvlakte-Vaanplein and A2 Maastricht projects from the end-2014 level.
The total assets of the Infrastructure division decreased compared to the half-year and year-end 2014 figures to €93 million due to disposal of the offshore activities, completion of work in progress and the settlement of receivables from various projects.
In the first half-year the order book decreased by €75 million to €484 million due to the progress made on a number of large long-term projects, the exit from the capacity-driven markets, and because few projects were acquired in the domestic market during the past half-year.
BUILDING & DEVELOPMENT DIVISION
Building & Development
first half year first half year
x EUR 1 million 2015 2014 2014
Revenue 283 263 611
EBIT 2 ( 3) ( 7)
Margin 0.7% (1.1%) (1.2%)
Order book 463 613 625
Assets 304 293 332
The Building & Development division recorded an operating profit of €2 million in the first half-year on an 8% increase in revenue. This result includes a €1 million book profit from the disposals of the interests in the Benelux Secondary PPP Fund and the Zaanstad Penitentiary (Pi2) PPP project. The results were negatively impacted by project losses on the Nobo Otrobanda Hospital in Curaçao (€0.7 million), settlement of the OVT Breda claim (€1.5 million), the Hooghendijck housing project in Beusichem (€1.3 million) and a number of projects in the North/West and South areas. The Erasmus Medisch Centrum project in Rotterdam made a positive contribution, as did higher overhead coverage and lower tender costs.
The assets of the Building & Development division amounted to €304 million and were €28 million lower than at the end of 2014 as a result of disposals in the PPP projects.
The order book showed a decline of 26% to €463 million in the first half-year. There were fewer projects in the market and no integrated, complex projects were taken on. The Rijkskantoor de Knoop PPP project in Utrecht was nevertheless awarded to the joint venture in which Ballast Nedam is participating. The construction of the new VUmc Imaging Center in Amsterdam was also awarded provisionally to Ballast Nedam and ULC Groep. These two projects have not yet been entered in the order book.
Housebuilding activities
Construction work started on 368 homes in the first half of 2015. That is higher than the 352 homes that entered production in the whole of 2014. The number of completed homes also increased: 445 in the first half of 2015, compared to 428 in the whole of 2014. This rise was due particularly to the high production of 700 homes on the (Y)ours Leiden campus, a joint development by VORM, Ballast Nedam and Syntrus Achmea Real Estate & Finance.
The total exposure to property development decreased in the first half-year by €5 million to €171 million. This decrease consists of:
- €2 million decrease in land positions, due to a number of smaller sales;
- €1 million decrease in unsold real estate;
- €2 million decrease in unconditional purchase obligations compared to the end of 2014 as a result of land purchase for the start of a housing project.
SPECIALIZED COMPANIES & SUPPLIES DIVISION
The integration of the Specialized Companies & Supplies division was put into effect from 1 January 2015. For comparison purposes, explanatory notes are provided on the figures for each unit.
Specialized Companies
x EUR 1 million first half year 2015 first half year 2014 2014
Revenue 61 97 190
EBIT 1 1 5
Margin 1.6% 1.0% 2.6%
Order book 56 73 49
Assets 49 87 69
Specialized Companies ended the first half of 2015, like the first half of 2014, with a positive result of €1 million. Revenue in the first half-year decreased by €36 million to €61 million as a result of a reduction in activities and the completion of work on the A15 Maasvlakte-Vaanplein and A2 Maastricht.
The assets of Specialized Companies amounted to €49 million, €38 million less than in the first half of 2014. This was due to a sharp focus on working capital reduction and the decrease in activities.
The order book grew by €7 million to €56 million in the first half of the year. There are also further opportunities for specialized companies for the SAA A9 Gaasperdammerweg project.
Supplies
first half year 2015 first half year 2014 2014
x EUR 1 million
Revenue 43 74 151
EBIT 3 23 17
Margin 7.0% 31.1% 11.3%
Order book 39 47 61
Assets 92 192 135
Supplies recorded an operating result of €3 million, compared to €23 million in the first half of 2014. The result was positively impacted by the receipt of a €3.2 million earn-out fee resulting from the sale of Ballast Phoenix Ltd in 2014. The revenue of Supplies decreased by €31 million to €43 million as a result of the disposals of Ballast Phoenix Ltd and Bontrup Beheer BV and the closure of Omina Plaatvloer in 2014. Raw materials performed well in the first half of 2015.
The result for the first half of 2014 includes a €22 million book profit on the sale of Ballast Phoenix Ltd and €5 million of impairments and reorganization costs. Without these exceptional items, the operating result in the first half of 2014 would have been €6 million. The lower operating result of zero in the first half of 2015 (before non-recurring income) was due in particular to utilization losses in the concrete factories.
The assets of Supplies amounted to €92 million, €43 million less than at the end of 2014 as a result of a lower working capital requirement.
The order book decreased by €8 million to €39 million in the first half-year because few projects were taken on by the Infrastructure and Building & Development divisions. The order book for the concrete factories in the second half of 2015 is well filled. The supply companies will focus more on the development of a third-party market in Belgium and Germany.
The full half-year report, including the half-year financial statements, has been published at http://www.ballast-nedam.com.
Ballast Nedam targets its strategic focus at successfully acquiring and carrying out integrated projects in the working areas of housing and mobility in the Netherlands and internationally. We also work on projects where we can make a difference for the client with our expert knowledge and skills. Ballast Nedam applies a differentiated market approach for its three divisions.
With further industrialization of the building process through the use of innovative modular concepts and standardization Ballast Nedam creates enduring quality at the lowest possible life cycle costs for its clients and society. The Ballast Nedam share is included in the Amsterdam Small Cap Index (AScX) of Euronext. http://www.ballast-nedam.com
This document is for information purposes only and does not constitute, and should not be construed as, an offer to sell, or the solicitation of an offer to acquire or subscribe for, securities of Ballast Nedam N.V. (the "Company") in the United States, Australia, Canada, Japan, their territories and possessions, or any other jurisdiction in which such offer or sale of securities would be unlawful prior to registration, exemption from registration or qualification under the securities laws of such jurisdiction.
The securities of the Company have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") and will not be registered with any authority competent with respect to securities in any state or other jurisdiction of the United States. Accordingly, the securities of the Company may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act. No public offering of the securities of the Company is being made in the United States.
No communication or information relating to any offer or sale of securities of the Company may be disseminated to the public in jurisdictions, other than The Netherlands, where prior registration or approval is required for that purpose. No action has been taken that would permit an offer of securities of the Company in any jurisdiction where action for that purpose is required, other than in The Netherlands.
The Company has not authorised any offer to the public of securities in any Member State of the European Economic Area (other than the Netherlands). With respect to any Member State of the European Economic Area (other than the Netherlands), and which has implemented the Prospectus Directive (each a "Relevant Member State"), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus in any Relevant Member State. As a result, the securities may only be offered in Relevant Member States (i) to any legal entity which is a qualified investor as defined in the Prospectus Directive; or (ii) in any other circumstances falling within Article 3(2) of the Prospectus Directive. For the purpose of this paragraph, the expression "offer of securities to the public" means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable the investor to decide to exercise, purchase or subscribe for the securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State.
The release, publication or distribution of [this announcement/ these materials] in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which [it is/ they are] released, published or distributed, should inform themselves about, and observe, such restrictions.
[This announcement does / These materials do] not constitute a prospectus within the meaning of the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht) and [do/does] not constitute an offer to sell or the solicitation of an offer to acquire securities. Any offer to acquire securities pursuant to the proposed offering will be made, and any investor should make his investment, solely on the basis of information that will be contained in the prospectus to be made generally available in the Netherlands in connection with such offering. When made generally available, copies of the prospectus may be obtained at no cost from the Company or through the website of Euronext Amsterdam, the Netherlands Authority for the Financial Markets and/or the website of the Company.
PRN NLD
