Balfour Beatty’s HK joint venture Gammon drives up half-year revenue
14 August 2024
A strong performance from Hong Kong-based construction company Gammon has helped to drive up revenue at UK-based civil engineering firm Balfour Beatty.
Leo Quinn, Balfour Beatty Group Chief Executive
Balfour Beatty unveiled a 3% year-on-year increase in revenue for the half year to 28 June 2024 to £4.7 billion (US$6 billion). Its pre-tax profit for the period increased to £98 million (US$125.6 million), up from £97 million (US$124.5 million) in the same period a year before.
While there were small revenue declines in Balfour Beatty’s US and UK construction operations in the first half of 2024, those were offset by a strong showing from the company’s Gammon joint venture, which saw revenue increase of 22% to £714 million (US$916.5 million), up from £583 million (US$748.3 million) in the same period a year before.
Balfour Beatty owns 50% of Gammon, with the other 50% held by Jardine Matheson. It said the majority of new orders for the business came in the buildings market, in spite of high interest rates causing a slowdown in Hong Kong’s private residential sector.
It added that the outlook for the Hong Kong construction sector remains positive, amid government commitments to grow the railway infrastructure and build major new roads. The company is also set to benefit from plans to develop more than 3,000 hectares of land under the Northern Metropolis project.
The group’s overall order book grew slightly in the first half of the year and stands at £16.6 billion (US$21.3 billion).
Balfour Beatty chief executive Leo Quinn said, “The Group’s outlook for each of its four chosen growth markets of UK energy transition and security, UK transport, UK defence and US buildings has improved year to date, driven by a combination of bidding success and improved economic and political stability, particularly in the UK.
“The new Labour Government has committed to grow the UK economy, and has highlighted proposed investment in energy and transport infrastructure, the leveraging of private investment, planning reform and upskilling the UK’s workforce as key components of their plan to achieve this. They have also pledged to increase defence spending over time. This direction of travel is positive for Balfour Beatty in the medium term.”
Segment analysis of Balfour Beatty’s half-year results to 28 June 2024.
