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BAM reports €5m profit as margins under pressure

10 May 12 Royal BAM Group has recorded a quarterly net profit of €5m (£4m) for the first quarter of 2012, and a margin before tax down to 0.2% from 1.5% last year.

The net result for the corresponding quarter last year had been €20.1m.

Volumes and margins are under pressure in construction, M&E services and civil engineering, the company said. Property is facing a worsening climate in the Netherlands but its unchanged elsewhere. PPP is on track, with a health active tender pipeline.

The order book increased in the first quarter, due mainly to large orders in Germany and Australia.

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The company's financial position has been strengthened by refinancing, and the sale of Tebodin was completed in April.

First quarter revenue from continuing operations was down to €1,556m from €1,625m in the same quarter last year.

“BAM’s Group results for the first three months of 2012 were broadly in line with our expectations for what is our seasonally weakest quarter," said Royal BAM Group chairman of the executive board Nico de Vries. "Lower volumes and margins at construction and M&E services and civil engineering reflected the tailing off of older, more profitable contracts in 2011, the greater competitive pressure on new orders booked in recent quarters which are now flowing through to revenue and the somewhat more severe winter conditions. We expect operational results to improve in the remainder of the year. The closing order book is up on end-2011 but down versus a year ago, reflecting our selective approach to tendering to protect profitability. In our Property sector, conditions in the Dutch residential and commercial property markets are a source of concern and we are monitoring these closely. PPP is performing well, with a strong pipeline of active tenders and prospects. Despite the difficult environment, we are making good progress on our strategic priorities to promote synergies across the Group, to strengthen our financial position and to grow in new markets.”

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