AF Gruppen reports growth and good earnings in Q4 2022

10 Feb 2023 07:00 CET

AF Gruppen (AFG) delivered a profit margin of 5.9 per cent in the final quarter
of 2022. Revenues in the quarter increased by 5.6 per cent compared to the same
quarter last year to NOK 8,568 million. Revenues for 2022 amounted to NOK 31,205
million, which was an increase of 12.0 per cent from the previous year.

AF Gruppen’s revenues were NOK 8,568 million (8,112 million) in the fourth
quarter and NOK 31,205 million (27,868 million) in 2022. Profit before tax was
NOK 502 million (635 million) in the fourth quarter and NOK 1,400 million (1,580
million) for 2022. This corresponds to a profit margin of 5.9 per cent (7.8 per
cent) in the fourth quarter and 4.5 per cent (5.7 per cent) in 2022. The total
order backlog was NOK 39,765 million (38,646 million) as at 31 December 2022.

AF Gruppen is in a strong financial position. Net operating cash flow was NOK -
38 million (301 million) in the fourth quarter and NOK 1,460 million (1,415
million) for the full year. As at 31 December 2022, AF Gruppen had net
interest-bearing debt of NOK 329 million (-29 million). Earnings per share for
2022 were NOK 8.96 (9.60). The Board of Directors proposes a dividend for
payment of NOK 6.50 (6.50) per share for the first half of 2023.

"We achieved very good profitability in large parts of the Group during the
quarter, particularly within Offshore and Energy and Environment. Civil
Engineering reported a double-digit profit margin, and Betonmast showed positive
development and achieved a good result for the quarter. The overall
profitability for Construction and Sweden was not satisfactory, despite the fact
that several units in both business areas delivered very strong results. There
was too much variation in the performance of the units, and we are not satisfied
with overall profitability in 2022," said Amund Tøftum, CEO of AF Gruppen.

AF imposes the same strict requirements on all its partners and suppliers as it
does on its own employees. The goal is zero serious injuries and work-related
absence. Figures from subcontractors are included in the injury statistics. The
LTI rate for the fourth quarter was 0.9 (0.9). For 2022, the LTI rate was 1.1
(1.1).

AF works in a systematic and targeted manner in order to avoid work-related
absence. Sick leave for the fourth quarter was 4.7 per cent (4.9 per cent). For
2022, sick leave was 4.6 per cent (4.6 per cent).

“In 2022, we entered into contracts for several large, complex projects with
high social benefit. Among other things, AF Gruppen has been awarded two
contracts from Oslo Municipality related to new water supply in Oslo, and we are
working on several wind power projects in Sweden. We have been chosen as the
contractor for a new airport in Mo i Rana, for which we are still in the
collaboration phase. We have also entered into an agreement to construct a new
cable tunnel in Oslo for Statnett, and we perform projects within construction
and rehabilitation to reuse and refine existing buildings. These projects will
enable us to use our expertise and abilities to execute challenging projects.
These projects are important to ensure that we continue to attract, develop and
retain the industry's best management and professional expertise," Tøftum said.



Selected highlights from the quarter:

• Civil Engineering increased the level of activity compared to the same quarter
last year and delivered very good results. AF Anlegg had two major projects in
production at the end of the quarter: E6 Rentvannstunnel in Oslo and Bergtunnlar
Lovö in Stockholm. AF Anlegg, Målselv Maskin & Transport, Eiqon and Stenseth &
RS reported very good results for the quarter, and Consolvo achieved good
profitability.

• The Construction business area increased revenues compared to the same period
last year, however there was significant variation in performances and results
that the units reported. High construction costs and energy prices negatively
impacted the profitability of the units, and the business area as a whole
delivered a weak result for the quarter. AF Bygg Oslo, Åsane
Byggmesterforretning and Haga & Berg reported very good results, while Strøm
Gundersen and HTB achieved good results.

• Overall, Betonmast achieved a good result for the quarter. The units Betonmast
Oslo, Romerike, Buskerud-Vestfold, Trøndelag, Asker og Bærum and Østfold
delivered very good results in the quarter. Betonmast Røsand delivered a good
result for the quarter. Since 2022, Betonmast Sweden has become part of the
Swedish business area, and the comparison figures have been restated.

• The Property business area had low sales during the quarter, and sales
contracts for 9 (135) homes were signed in the quarter, of which AF’s share was
3 (60). In 2022, sales contracts have been signed for 216 (550) homes, of which
AF’s share is 89 (256). In the fourth quarter, 73 homes were handed over at
Brøter Terrasse, an AF Eiendom project in Lillestrøm. In addition, AF Eiendom
completed the Hasle Tre commercial property during the quarter. There were seven
residential property projects in the production stage at the end of the quarter.
A total of 940 units are in production, of which AF’s share is 438. The sales
ratio for commenced projects is 76%.

• Energy and Environment delivered very good results in the quarter. AF's
demolition business (AF Decom) demolishes and sorts different materials for
recycling. AF Decom demolished and facilitated the recycling of 1,941 (6,860)
tonnes of metal in the fourth quarter, and 17,629 (14,806) tonnes of metal for
the year. The foundation for our environmental activities is that waste can to a
large extent be reused, and thus be a valuable resource in a growing circular
economy. AF's environmental centres receive contaminated material and are
working to reuse as much as possible instead of it going to landfill. The
recycling rate realised for contaminated material in the fourth quarter was
80.1%. AF Energy saw a high level of activity and delivered a very good result
in the fourth quarter. Good operational performance in renewable energy projects
and profits from the sale of an energy hub had positive impact on results.

• The Sweden business area, which includes AF's Swedish operations in civil
engineering, construction, property and demolition, experienced yet another
quarter with a large gap between the best and weakest performances, and the
overall results were weak. There were further downward adjustments in the
project estimates for the former Betonmast Sweden during the fourth quarter.
Kanonaden, AF Härnösand Byggreturer, AF Prefab in Mälardalen and AF Bygg Syd
reported very good results in the quarter. HMB delivered good results.

• Offshore revenue increased by 63% compared to the fourth quarter last year,
and the business area delivered very good results. AF Offshore Decom reported
very good profitability. A high level of production and good operational
performance at the Environmental Base in Vats made a significant contribution
towards solid results for the quarter. AF Offshore Decom sorted 90% of the
structures for recycling in the fourth quarter, where metal is the main
component. AF AeronMollier had a high level of activity and good profitability
in the fourth quarter.



For further information:

Amund Tøftum, CEO, mobile +47 920 26 712
Anny Øen, CFO, mobile +47 982 23 116
Knut Ekern, Director Corporate Communications, mobile +47 930 02 600


www.afgruppen.no

More information:
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581944_Quarterly Report AF Gruppen Q4 2022_EN.pdf