Kvaerner Construction’s results for the first six months of the year show steady growth in turnover and significant increases in profit.
Profit before tax and goodwill is up by 104% to £18.4 million (1999: £9 million) with operating profit increasing by 229% to £13.5 million (1999: £4.1million). Turnover is up by 3.3% to £641 million (1999: £621 million). The order book at £1.4 billion (1999: £1.5 billion) is in line with Kvaerner Construction’s policy of selective tendering while profit before tax at 2.9% shows a healthy increase over the same period last year (1999: 1.5%).
Commenting Keith Clarke, Chief Executive, said: “Good predictable results – which is what we want. Three years ago we redefined our business, selecting design/construct and partnering as our preferred route. The impact of that commitment can be seen in the figures issued today with an excellent increase in operating profit and a steady order book. We also have a healthy increase in turnover and £350 million of projects in the final stages of negotiation.
“Our emphasis now is on improving our supply chain management and product development. We are concentrating on developing the more profitable niches within our markets while also focusing on project performance through a system of internal networking to transfer practical know-how. Our aim is to improve both project performance and profit margins. Improvements made now will start to impact on the figures in the next couple of years. It is a slow process - it has taken us three years to get this far but we are now reflecting steady and continuing growth in our figures. We are becoming much more predictable.”
As part of an on-going strategy of concentrating on niche markets where the company can bring added value, Kvaerner Construction has recently bought Whessoe International, a design company, specialising in Liquid Natural Gas (LNG) facilities. This acquisition gives Kvaerner a total capability in LNG and over 10% of this expanding £1 billion a year international market.
Kvaerner Construction has also launched Kontor, a bespoke fit-out company which has already won five projects this year worth £20 million. Its mining and tunnelling, business Kvaerner Cementation, is the first British contractor to re-enter Iran whilst its recently opened office in Canada has secured a construction contract for the Americas deepest mine shaft near Ontario. Kvaerner Cementation India has produced a good set of half-year figures with a doubling of profit before tax to 3.2% from 1.5% for the same period last year.
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