Net sales and profit

Net sales and operating profit

Group net sales for the first quarter 2019 amounted to SEK 11,359 million (11,490), which was a decrease of one percent. Even after adjustments for acquired and divested units net sales decreased by one percent.

Net sales in business area Construction grew by three percent. Net sales includes a greater portion of other building construction. In business area Civil Engineering net sales increased by four percent generated in Operations and maintenance and Infrastructure. Net sales in business area Industry grew by two percent. In business area Project Development net sales were slightly higher in Property Development but lower in Housing Development, where fewer projects in Norway and Finland were turned over compared to the first quarter last year.

Of the period’s net sales SEK 1,925 million (2,525) were attributable to sales and production outside Sweden.

Operating profit for the first quarter 2019 amounted to SEK 265 million (290) and the operating margin shrunk to 2.3 percent (2.5). The operating profit was effected by SEK 5 million through additional IFRS 16 Leases in the first quarter 2019. The operating margin for the latest rolling 12 month period was unchanged at 4.9 percent compared to the entire year 2018.

The operating margin in business area Construction was 2.3 percent (2.2) during the first quarter 2019. In business area Civil Engineering the operating margin was 1.2 percent (1.5). Operating profit in business area Industry was slightly lower compared to the corresponding quarter last year. Lower profits are explained by the fact that larger operations require more maintenance, primarily in Asphalt. Operating profit in business area Project Development was lower than the corresponding period last year. Operating profit in Housing Development contracted because fewer projects in Norway and Finland were turned over but the operating margin improved to 7.8 percent (7.1). Contributions from joint ventures in Property Development were higher compared to the first quarter 2018 while operating profit was lower in the first quarter in other operations.

Eliminations and reversal of internal profit in our own projects has affected the result net by SEK -13 million (-3). As a result of building up more property on our own balance sheet a higher level of profit has been eliminated than in previous years. Elimination is reversed in connection with the external divestment of a project.

Depreciation and write-downs for the period were SEK -292 million (-238). Depreciation was effected by SEK -44 million through additional IFRS 16, Leases in the first quarter 2019.

Net financial items amounted to SEK 4 million (-34). Net interest amounted to SEK -18 million (-8). Net interest was effected by SEK -6 million through additional IFRS 16 Leases in the first quarter 2019. Net financial items included positive effects of, among other things, dividends and currency exchange rates.

Pre-tax profit was SEK 269 million (256).

Profit for the period was SEK 224 million (218).

Seasonal variations

Group operations, particularly in Industry and Civil Engineering, are affected by fluctuations that come with the cold weather during the winter half of the year. Normally the first quarter is weaker than the rest of the year.