Orders increase at Peab

Orders received by Nordic contractor Peab for the first quarter of 2016 amounted to SEK11.89 billion (€1.28 billion) compared to SEK9.56 billion (€1.03 billion) for the same period last year.

The company said the level of orders received had risen in all business areas. Two major highway projects are included in the orders received in the civil engineering business area – the E6 Trondheim in Norway and the reconstruction of the E45 outside Gothenburg, Sweden – which were each worth around SEK1 billion (€107 million).

Peab said its order backlog at the end of the period amounted to SEK31.55 billion (€3.39 billion) compared to SEK26.75 billion (€2.87 billion) at the end of the same period last year.

It added that of the total order backlog, 45% was expected to be produced after 2016. Swedish operations accounted for 84% of the order backlog, compared to 87% a year ago.

Net sales in the construction business area shrunk by 9%. The company said the reduction was in part due to the fact that the project Mall of Scandinavia, which was completed during the fourth quarter of 2015, had a high production rate during the comparable period.

Jesper Göransson, CEO and president, said, “The first quarter was positive with a higher level of orders received and an improved operating margin. With a strong cash flow we continue both to invest in our business and cut debt.”

He said that Sweden’s positive development of building start-up investment was expected to continue in 2016. He said that the forecast for this year pointed to relatively weak economic growth in Norway, which could mean a slight decline in building construction start-ups for the year. No growth is expected in Finland’s building construction industry in 2016, he added.

The market conditions for civil engineering were considered good for Sweden and Norway, however, with continued growth, while the market in Finland was not expected to grow.

Göransson said, “The first quarter is seasonally weak compared to the other three quarters, particularly in civil engineering and industry.”

Net sales were said to have decreased in the construction business area in comparison to the same quarter of 2015, but the margin improved slightly. Net sales decreased in civil engineering, but the margins rose, he said.