In This Article:
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Orders Received: 13.3 billion SEK.
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Order Backlog: 53.5 billion SEK.
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Net Sales: 14.3 billion SEK.
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Operating Profit: 665 million SEK, up 8% compared to last year.
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Earnings Per Share (EPS): 12.7 SEK on a rolling 12-month basis.
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Net Debt to EBITDA: 1.79, below the target of 2.5.
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EBIT for Industry Segment: 338 million SEK.
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Property Development Operating Profit: 37 million SEK.
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Tax Rate: 22% for the quarter.
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Cash Flow: Negative, impacted by lower accounts payable.
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Net Debt: 1.1 billion SEK higher than last year.
Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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NCC AB (STU:NCGB) reported an 8% increase in operating profit compared to the same quarter last year, adjusted for capital gains.
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The company maintained a stable order backlog of 53.5 billion SEK, indicating a strong pipeline of future projects.
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There is a continued positive market outlook, particularly in infrastructure, public buildings, and defense sectors.
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The company achieved a significant reduction in CO2 emissions, surpassing its target with a 65% reduction due to increased use of biofuels.
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Building Nordics showed substantial margin improvements, particularly due to restructuring efforts in Finland and improvements in Norway.
Negative Points
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The property market remains slow, with low letting ratios and no new projects sold or started in the quarter.
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Higher corporate net debt and increased interest rates have led to a significant rise in financing costs.
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Building Sweden experienced a slight decline due to a challenging market environment.
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The company reported a negative cash flow for the quarter, attributed to lower accounts payable and the absence of cash inflow from previous asset sales.
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The 'Other and Elimination' segment showed a decrease in EBIT due to increased group-level costs, particularly in IT development.
Q & A Highlights
Q: Can you elaborate on the significant increase in financing costs this quarter, particularly regarding higher corporate net debt and lower capitalized interest rates? A: Susanne Lithander, CFO: The increase is largely due to the inability to capitalize interest on completed projects. We now have seven completed properties, which impacts our financial net as we can no longer capitalize interest on them. I will provide exact figures later.
Q: Regarding unsold completed developments, how representative is the rental income in the quarter, and how are the sales processes progressing? A: Tomas Carlsson, CEO: Rental levels are strong without discounts, with a letting ratio of about 80% for completed projects. We are actively marketing these assets and see positive signs in the market, although we cannot forecast sales timing.