Heijmans: Profit at lower revenue levels (NL)

Heijmans has today released its results for the half year 2010.

Gerrit Witzel, Chairman of the Heijmans Executive Board: "Our results in the first half of 2010 demonstrate a clear improvement. Even though the residential market shows some weak signs of modest recovery, the market conditions remain very difficult.

"Our strategy remains focused on the Netherlands. We keep our focus on sustainable improvement of our products and processes. We will thereby enhance the quality for our clients, the costs will be reduced and the profitability increased. In the past period we received many compliments from both clients as for example road users, on the quality of our work. Barring unforeseen circumstances, Heijmans expects 2010 to end up profitably."

Important developments H1 2010
The market in the Netherlands increasingly demands higher quality and sustainability. Heijmans already responded to this in 2008, by organizing both the Residential Building and Property Development sector as well as the Non-Residential Building and Technical Services sector in closer cooperation with each other. The effects of this have been visible during the past half-year. Larger projects are progressing better thanks to tighter project management and there has been a favorable effect on costs of failure and quality. There have also been several major projects contracted during the past half-year, such as the Meander Hospital in Amersfoort, the Talentencampus (Talents Campus) in Oss, the Frits Philips Centre in Eindhoven, and the Tax and Customs Administration's office in The Hague. The acquisition of the projects have enabled Heijmans to strengthen its position in the Dutch market for multifunctional projects. However, the expectation is that the market for both public and commercial property development will be limited during the coming years.

There is still no sign of sustainable recovery in the housing market. Consumer confidence is low. Moreover, the market is reacting to the uncertainty concerning mortgage interest deductibility. Heijmans sold more houses in the first half-year compared to the first half in 2009. Of the total number of 683 houses sold, more than approximately three-quarter were sold to private individuals and the remainder to investors and corporations. In the first half of 2009, a total of 450 houses were sold, of which more than half to private individuals.

Demand in the infrastructure market is increasingly focusing on the combination of design, implementation and maintenance, while retaining the mobility and uninterrupted flow of traffic for road users, thus increasing the complexity. In older projects, such as the Eindhoven A2 Ring Road completed in the second quarter, Heijmans demonstrated that complexity and mobility with respect to major road works could be excellently combined. Heijmans has acquired three of the total of six so called 'emergency packages' during the past half-year, which will commence implementation with effect from the second half of the year.

In the first half of 2010, revenue realized was €1.24 billion, a decrease of 17% relative to the first half of 2009 (autonomously 15%). This decrease is related to both the initiated focus on margin rather than volume in contracting processes, and the less favourable market conditions in most market segments.

Operating result
The operating result improved significantly. In the first half of 2010, an operating result of €14 million was realized, compared with an underlying operating profit of €5 million in the first half of 2009. The result improvement is primarily realized in The Netherlands and is mainly due to a policy of focus on margin rather than volume, tighter management of the organization, additional cost reductions and a favorable procurement market. This has led to realization of better results at Residential Building, Infrastructure and Non-Residential Building, whereas the results of Property Development and Technical Services remained below the first half of 2009, partly due to lower revenue

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