Heijmans reiterates outlook for 2018, good performance business
areas
Highlights
- All business areas perform well;
- Dispute Wintrack II to arbitration, loss provision of € 10
million;
- Order book at healthy level, stood at € 2.0 billion
end-September;
- Strong cash development, early reduction of credit facility to
€ 121 million;
- Heijmans reiterates its forecast that all business units will
make a positive contribution to the result for 2018.
Ton Hillen, Chairman of the Executive Board /CEO Heijmans: “The
market conditions and the performance of Property Development and
our residential building activities remain good, with revenues and
results that continue to increase in the second half of the year.
Our non-residential activities are on track with the start-up of a
number of new projects, and the increased revenue will translate
into a positive contribution to Heijmans’ operating result. The
majority of our infra activities are performing in line with
expectations. We remain cautious and selective in our acquisition
policy, in view of current market conditions. The Wintrack II
project has been terminated by client TenneT as a result of a
difference of opinion. We are taking this dispute to arbitration.
Our strong market positions and the positive development of our
activities have improved our financial position, which has enabled
us to accelerate the reduction of our credit facility to the level
agreed for mid-2019. We reiterate our outlook for 2018.”
Property Development The positive developments at
Property Development have continued, with growth in both revenue
and result. The energy we have put over the past few months into
maintaining a healthy pipeline of new projects up for sale, is now
paying off. In the period to 26 October of this year, we sold 1,631
homes, compared with 1,636 homes in the same period of last year.
Heijmans sold 922 of these homes to private buyers (2017: 1,061)
and sold 709 to investors (2017: 575).
Heijmans continues to feel the persistent pressure on the
housing market. Due to the lack of new development locations in the
Netherlands, rising costs and the availability of resources, the
supply on the housing market is lagging the enormous demand, while
rising house prices are putting additional pressure on the
affordability of homes. Heijmans is responding to this by working
with preferred procurement partners and using standardised concepts
whenever possible.
In the period under review, Heijmans closed a development
contract with the city of Rotterdam for new-build project
Havenkwartier, which includes 200 owner-occupier homes in the
Katendrecht district of the city. A number of projects also
progressed to the sales phase, including Greenville Leidsche Rijn
and De Verbinding Spaarndammerhart, while we have been making
preparations to start construction on the Land van Dico project in
Uden in May 2019.
Building & Technology The development of
Building & Technology is on track, with clear growth in
residential building activities and the targeted acquisition of
non-residential projects, as well as the acquisition and extension
of service & maintenance contracts. At the residential building
activities, revenue, result and order book have all increased.
Heijmans’ concept homes are very much in demand. So far this year,
we have produced the shells of around 800 homes, which puts
Heijmans on track to realise more than 1,000 of these homes in
2018. Heijmans offers both Heijmans Huismerk and Heijmans Wenswonen
homes (in Berkel-Enschot and Nijkerk among other places), as well
as Heijmans ONE homes (in Nijkerk among others). Heijmans has
developed gas-free versions of these homes.
The non-residential projects that Heijmans acquired at the end
of 2017 and in early 2018 are progressing to the production phase,
which has pushed revenues to a considerably higher level than last
year. This is also contributing to the result and order book. At
end-August, it was announced that Heijmans had been chosen as a
preferred candidate in Schiphol’s Main contracts 2019 tender for
the Terminals 1 & 2 Parcel, with accompanying piers. The
initial term of this contract is three years, with an option to
extend the contract by two terms of three years. The specification
phase is now fully underway and we expect to reach a final
agreement at the end of 2018, after which we will begin execution
in April 2019. The construction of the New Amsterdam Court House
(NACH) and the construction of the new head office for the European
Medicines Agency (EMA), which Heijmans is realising in partnership
with Dura Vermeer, are moving full steam ahead.Heijmans is also
building a number of high-grade data centres.
Heijmans realises a substantial share of these revenues from
renovation, maintenance and management contracts, with a strong
focus on increasing the sustainability of buildings. Examples of
current projects in this segment include 174 homes in Alandsbeek,
Leusden, 24 homes in Hoofddorp and 64 homes in Zoetermeer. Heijmans
also completed the large-scale renovation of a care home complex in
Valkenswaard, which included the realisation of 105 care
apartments. As part of the non-residential activities, Heijmans is
currently redeveloping the tax offices on Laan op Zuid in Rotterdam
into a central government office, including maintenance. Another
example is the long-term maintenance contract for former royal
palace and museum Paleis Het Loo, where Heijmans is currently also
renewing and extending the technical installations.
Heijmans’ Technical Services activities (maintenance and
management) once again recorded an increase in revenue and result.
In this segment, Heijmans is currently working for various clients,
including ministries, educational institutions and medical centres.
Through its client knowledge, Services has managed to translate
long-term partnerships and integrated approach into stable growth
at healthy margins for many years in succession. These activities
use their strong base to deliver a structural contribution to the
continued development of Building & Technology.
Infra Unlike Heijmans’ other business areas,
Infra is not focused on growth. Instead, the focus on
predictability and a healthy balance in its order book remains this
business area’s highest priority. Revenue and result were in line
with expectations in the third quarter. In the third quarter,
TenneT formally terminated the Wintrack II contract. The
Heijmans-Europoles consortium and TenneT have failed to reach an
amicable agreement and this dispute will now be submitted for
arbitration. In the third quarter, Heijmans took a loss provision
of € 10 million for unpaid invoices and costs, as well as the
settlement of any commitments already entered into. As a result of
this contract termination, Infra’s order book has been adjusted by
€ 130 million.
Heijmans has signed a Letter of Intent with the Province of
North Holland for the joint completion of the Wilhelmina lock
project. The parties have reached agreements on the further
planning and execution, as a result of which the project remains
within the previously stated financial bandwidth. The work on this
project will resume in February 2019. In Schiphol’s Main contracts
2019 tender, Heijmans has also been selected as a preferred
candidate for the Runway sites Parcel. The specification phase for
this parcel is also fully underway. We expect to complete this
phase by the end of 2018, after which we will be able to start work
on the project in April 2019. Heijmans recently received the final
award for the maintenance of the main waterway Lemmer – Delfzijl.
The work on the N23 road project and the Gaasperdammerweg section
of the A9 motorway are progressing according to plan. The progress
of the work on the Beatrix lock in Nieuwegein is on track. The
widening of the A27/A1 motorway project is close to completion,
barring a number of finishing touches. In the regional infra
activities, Heijmans is working on a number of projects, including
the redevelopment of the Dardanellenstraat, part of Distripark in
Rotterdam, for the Port of Rotterdam. We recently also delivered
the redevelopment of the Quackplein in Nijmegen.
OutlookHeijmans’ operational business is
performing according to plan. Property Development and Building
& Technology are making solid progress. The growth of the
property development and residential building activities has
continued and Heijmans has been able to seize targeted
opportunities in the non-residential market, as a result of which
the non-residential activities will make a positive contribution to
our operating result. Although most of the infra activities are
performing in line with expectations, predictability and stability
remain our highest priorities. As long as the risk-return ratios in
the infra market remain suboptimal, Heijmans has no growth
ambitions for its infra business. While Infra’s results have been
negatively impacted by the termination of the Wintrack II contract,
these are still positive overall. Heijmans reiterates its forecast
that all its business areas will make a positive contribution to
its result for 2018.
Heijmans’ cash position has developed positively and the
company’s debt position has further improved. As a result of this,
in the third quarter Heijmans decided to reduce its credit facility
by € 22.75 million, which the company effectuated early October.
This means that Heijmans has already realised the phased reduction
to € 121 million, originally scheduled for 30 June 2019, and KBC
has left the bank syndicate early. The bank syndicate now consists
of ABN AMRO, ING and Rabobank and these banks have committed until
mid-2022.Annual results 2018Heijmans will publish
its annual results for 2018 on Thursday 21 February 2019.
About Heijmans Heijmans is a listed
company that combines activities related to property development,
building & technology, roads and civil engineering in the areas
living, working and connecting. Our constant focus on quality
improvements, innovation and integrated solutions enables us to
generate added value for our clients. Heijmans realises projects
for private consumers, companies and public sector bodies, and
together we are building the spatial contours of tomorrow. You will
find additional information at our website:
www.heijmans.nl
For more information / not for publication:
Media Marieke Swinkels-Verstappen
Communications +31 73 543 52 17
mswinkels-verstappen@heijmans.nl
Analysts Guido Peters Investor Relations + 31
73 543 52 17 gpeters@heijmans.nl
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