In the first quarter of 2005, Grontmij achieved a result after taxes of EUR 2.5 million (2004: EUR 1.3 million). The increase in the result after taxes is primarily due to a structural cost reduction at Consultancy & Engineering implemented in 2004-2005.
Revenue and result first quarter 2005
Grontmij's revenue in the first quarter of 2005 amounted to EUR 103 million (2004: EUR 121 million). Virtually this entire decline is attributable to the lower revenue in the first quarter of 2005 of Development & Operations. The latter decrease reflects the divestment of the mineral extraction activities and a fall in third-party project costs in relation to the first quarter of 2004. It should be borne in mind that a significant proportion of Grontmij's revenue is seasonal in nature.
The result after taxes rose in the first quarter of 2005 to EUR 2.5 million (2004: EUR 1.3 million). Earnings per share after taxes in the first quarter of 2005 consequently amounted to EUR 0.62 (2004: EUR 0.33).
The margin for interest and taxes for Consultancy & Engineering in the first quarter was 4.9% (2004: 3.6%). For Development & Operations the margin was -6.0% (2004: 0.8%).
From 2005 onwards, Grontmij will be reporting according to the International Financial Reporting Standards (IFRS). The comparative figures for 2004 have been adjusted accordingly. The impact of the introduction of IFRS in comparison with Dutch GAAP has been indicated in broad terms in respect of the 2004 annual figures. Grontmij determines the pension commitments on the basis of actuarial calculations every six months. This means that any change in the pension commitments in the first quarter has not been included in the above figures. The first-quarter figures have not been subject to an audit.
Issue of depositary receipts for shares abolished as anti-takeover measure
As indicated in the Annual Report 2004, the Management Board and the Supervisory Board, in consultation with the executive committee of the Foundation 'Administratiekantoor van aandelen Grontmij NV', reached a considered view concerning the issue of depositary receipts for shares in the company. The issue of depositary receipts currently applies both as an anti-takeover measure and as a means of preventing coincidental decision-making at shareholders meetings as a result of absenteeism.
The decision was taken in joint consultation to bring the issuing of depositary receipts for shares fully into line with the Dutch Corporate Governance Code in the course of 2005. Primacy will be attached to the interests of all depositary receipt holders and the issuing of depositary receipts for shares will only serve as a measure to prevent coincidental decision-making in shareholders meetings as a result of absenteeism. The anti-takeover protection provided by the issuing of depositary receipts will consequently be abolished.
Protection by means of the possibility of issuing preference shares remains in place. This measure is temporary in nature and enables the company to assess a potentially hostile takeover on its merits.
Outlook for 2005
Given the development of revenue and the result in the first quarter of 2005 and the developments in the market, the outlook for 2005 as a whole remains unchanged.
Grontmij expects 2005 to be very similar to 2004 in terms of order development in the Netherlands, Belgium and Germany. A limited recovery of the market is not expected until the second half of 2005.
Grontmij has simplified the organisational structure, substantially reduced its cost basis and continued debt rescheduling. The focus in the day-to-day work is on clients and cash flows. The divestment program will be continued, with the emphasis on capital-intensive businesses in the field of real estate development and waste management. Grontmij will also continue to extend its regional office network, especially in the urbanised areas of its home markets (the Netherlands, Belgium and Germany) and its focus countries (Poland, Hungary and the Czech Republic).