Rob van Gelder, Chairman of the Executive Board: "Things are slowly but surely coming back on track. The refinancing is complete. The balance sheet and solvency have been strengthened. We have thoroughly downsized and economized. The initial impacts are becoming evident."
Revenues in the first half of 2009 declined by 234 million in comparison with the same period in 2008 to 1,488 million. The decline is primarily due to the selective contracting policy pursued in particular by Non-residential Building NL and the decline in the sale of homes by Property Development NL.
The underlying operating result in the first half of 2009 improved in comparison with the first half of 2008 (first half of 2008: 2 million versus first half of 2009: 5 million) in spite of the significant drop in the operating result of Property Development due to the slowdown in the housing market.
Financial expenses on balance rose significantly during the first half of 2009 (35 million versus the first half of 2008: 5 million). 23 million of this is due to the impact of the one-time refinancing transaction costs and the related interest rate cash flow hedges.
The result after taxes for the first half of 2009 amounts to - 43 million. The result of the first half of 2009 is to a significant degree negatively impacted by the one-time costs due to the organizational and financial restructuring in the amount of 24 million and 23 million respectively.
The losses on building projects in the Netherlands and projects in Belgium have been halted. A clear improvement in the underlying operating results is discernable.
The order book at the end of June 2009 declined to 2,525 million (31 December 2008: 3,004 million) in particular due to a selective contracting policy adopted by building activities in the Netherlands and a slowdown in the inflow of new projects for Property Development NL. The order book's quality improved in terms of gross margin.
Organizational restructuring
The first half of 2009 was to a significant degree marked by the organizational restructuring of Property Development, Residential Building, Non-residential Building and Infrastructure (Road Building) in the Netherlands. These measures were taken to streamline the Heijmans organization and to make it more responsive. In addition, the operating organization was adjusted on the basis of current and projected lower volumes.
The restructuring is on track. The number of FTEs in the Netherlands decreased considerably. As at 30 June 2009, the number of FTEs on-balance fell by 689 to 6,665 FTEs in relation to 30 September 2008. The reorganization costs comprise the costs of the Social Plan, the costs related to employees to whom the Social Plan applies and the excess office space capacity due to the restructuring. The number of FTEs is ultimately expected to be reduced by approximately 1,100.
Property development (Netherlands)
The economic situation is having a major impact on the housing market. Consumer confidence has declined due to increased consumer concerns about 1) retaining employment; 2) the fear of incurring double housing expenses; and 3) the downward trend in the value of the privately owned home. The declining sale of new homes is further reinforced by the more stringent rules applied in granting mortgages.
The number of homes sold by Heijmans in the first half of 2009 consequently lags the homes sold during the comparable period in 2008 (1,187). In total, 600 homes were sold, while at the same time 150 contracts were dissolved. Due to the decline in sales, revenues and the underlying operating result lagged considerably. The underlying operating result in the first half of the year was 4 million (first half of 2008: 31 million).
The inventory of unsold homes at 30 June 2009 is 64 (31 December 2008: 53). The inventory of unsold finished commercial property at 30 June 2009 is nil. The invested capital increased in the first half of 2009, primarily due to land and other purchase commitments dating from previous years
