NCC fourth quarter pre-tax below expectations despite swinging into profit (NO)

NCC AB said its fourth quarter pretax result swung to a profit of 169m skr from a 653m skr loss a year earlier, as property writedowns fell to 21m skr from 782m skr. Market expectations were for a fourth quarter profit of 316 mln skr, according to SME Direkt.

Full year, the pretax result swung to a profit of 955 mln skr from a loss of 323 mln skr, with net financial items improving to minus 162 mln skr from minus 328 mln on decreased debts and lower interest levels.

Full year sales rose slightly to 45.437 bln skr from 45.252 bln, but excluding divestments of property projects, sales fell to 42.209 bln skr from 43.462 bln.

'Sales were positively affected by increased housing production and negatively by lower activity in International Projects which is being phased out,' NCC said.

Operating results rose to 1.117 bln skr from 5 mln in 2003.

NCC said the earnings improvement was mainly attributable to robust housing sales and the sale of properties.

'The group´s financial objectives have been revised. The previous target of 30 pct for the equity/assets ratio has been replaced by the objective that net indebtedness should not exceed shareholders´ equity, which is a more relevant goal for NCC´s continuing operations,' CEO Alf Goeransson said.

The target for return on equity has been retained at 15 pct, as has the goal that the group should generate a positive cash flow.

In addition, the dividend policy has been changed from the goal of distributing approximately half of profit after taxes to shareholders to at least half of profit after taxes.

'In view of NCC´s strengthened financial position, the board proposes an ordinary dividend of 4.50 skr per share, plus an extraordinary dividend of 10.00 skr per share, making a total of 14.50 skr per share,' Goeransson said.

He said that the Nordic construction market demonstrated stronger-than-expected growth during the fourth quarter and that the company believes that the construction market will grow by 1-2 pct in 2005, compared with 2004.

Orders received increased to 12.713 bln skr from 10.096 bln. NCC said demand for housing was strong throughout the Nordic region, and the increase in orders received consists of both proprietary housing projects and external housing contracts.
Source: Freeman

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