MT Højgaard nets half a billion contract in Albertslund

MT Højgaard has been chosen to refurbish 544 terraced houses in Albertslund South urban district in a 520 million DKK turnkey project awarded by BO-VEST. The work will commence this August and last for around three years. The refurbishment is part of a larger plan called “Master Plan South” started in 2009. There were numerous other bidders and MT Højgaard said it was the best on price, quality and process. The project is expected to have a positive impact on revenue and profit over its lifetime but does not influence 2012 guidance. MT Højgaard is owned by two listed companies Højgaard Holding (CPH: HOEJ B) and Monberg & Thorsen (CPH: MT B)

MT Højgaard lowers 2012 expectations

Danish construction company MT Højgaard (MTH), which is owned by two listed companies Højgaard Holding (CPH: HOEJ B) and Monberg & Thorsen (CPH: MT B) released Q1 2012 interim result today. The company called the financial performance unsatisfactory. The loss before taxes of 152 million DKK exceeded even internal estimates. Revenue was actually up nicely to 2.5 billion DKK but many projects, particularly two bridge projects in Sweden.

The company says that unfortunately margins on orders accepted in 2011 and before that are too low compared to the complexity and risk profiles of these orders. There have been management changes due to the aforementioned issues earlier. MTH now expects to post a loss for the fiscal year 2012 as opposed to an earlier expectation of a positive result. Revenue is expected to be even or slightly higher than in 2012 but pre-tax margin should hover around -1%. The overall result for the remaining three quarters is expected to be positive and the annual operating cash flow is also expected to break par.

MT Højgaard post annual loss, fires CEO

Denmark’s largest construction & civil engineering company MT Højgaard posted an annual pre-tax loss of 335 million DKK in 2011, corresponding to pre-tax margin of -3.6%. The firm described the year simply as ”bad”. The loss was larger than what the company had been guiding for.

MTH says that the poor result is not attributable to poor market conditions alone. President & CEO Kristian May is therefore let go and Board Of Director’s deputy chairman Jørgen Nicolajsen will be acting as interim President & CEO until a permanent replacement can be found. The company will start to focus on risk management and profitability even more vigorously.

The company says that balance sheet is still healthy with equity of 1.3 billion DKK (equity ratio is down to 22.8% from 34.5% at the end of 2010). The order book stands at 9 billion DKK. In 2011 revenues were 9.3 billion and 2012 guidance is for a similar amount. Financial performance is expected to be positive.

MT Højgaard is owned by two listed companies: Højgaard Holding (CPH: HOEJ B) and Monberg & Thorsen (CPH: MT B). Both of them are under considerable pressure in today’s trading. After Monberg & Thorsen divested its additional operations last year, it has been speculated that some kind of arrangement combining these companies might be forthcoming. It is now said that an independent listing will be postponed until better results are shown.

Other week 49 2011 news from Nordic companies

Here are some additional newsworthy events in brief:

Financial Times is reporting that Nokia is coaxing interest of potential buyers to divest its luxury phone brand Vertu. Some private equity firms seem interested and the sales price should be several hundred million Euros.

Eu/Norway fish talks for 2012 North Sea fisheries resulted in increases for herring, haddock and whiting quotas (with North Sea herring quota more than doubled to 405,000 tons), with cod and saithe quotas down a notch. Further talks will be made for mackerel total allowed catch as a solution in the mackerel war with Faroe Islands and Iceland is sought after.

Christmas demand has raised Norwegian salmon spot prices some 20% within a few weeks. While still far away from 45 NOK per kilo levels of this summer, this breaks a lengthy trend straight down and farmed salmon companies have responded positively.

Vestas turbine in Ayrshire wind farm, Scotland caught fire in hurricane Bawbag.

Maersk Drilling received LOA from Det Norske Oljeselskab (OSE: DETNOR) to Draupne license in the North Sea for newbuild jack-up rig, XL Enhanced 2, which is designed for use in ultra harsh environment and is currently under construction in Singapore scheduled to be delivered in 2014. The total value of the three year contract is over 400 million USD.

Outotec has acquires furnace refractory demolition business Kiln Services Australia. The company envisions doubling Kiln’s annual sales over the next three years.

Højgaard Industri, a part of Højgaard Holding (CPH: HOEJ B) won a new management contract‏ with Banedanmark for the production of concrete sleepers at the Fredericia facility. The previous contract with between the companies was coming to a close and Højgaard Industri won out in the contract award procedure.

There have been wild swings in Frontline (OSE: FRO) stock after its creative restructuring plan was made public this week.

Kone Corporation will supply elevators and escalators to Lishui Wandi Plaza. The large eight building complex in the city of Lishui in Zhejiang province should be completed in 2013.

Clas Ohlson (STO: CLAS B) missed expectations for 1.5.2011-31.10.2011 period.

TTS Group ASA won two contracts from Hyundai Mipo Dockyard co. Ltd worth around 117,5 million NOK in total.

Purchase-to-pay and Financial Management solutions software provider. Basware Corporation lowers 2011 estimates.

Cevian keeps buying into Tieto ((OMXH: TIE1V, OMXS: TIEN).

Neste Oil is selling its 50% portion of iso-octane, a gasoline component produced from Butane, plant in Edmonton, Canada to Keyera Corp for 99 million USD.