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- Operating loss of €10 million, including €4 million of restructuring costs, €1 million book profit on disposals and non-recurring income of €3.2 million in respect of earn-out
- Net loss of €15 million (first half 2014: €51 million loss)
- Order book worth €789 million (end-2014: €1026 million)
- Financing position €48 million negative (end-2014: €38 million positive)
- Solvency expected to improve in second half due to rights issue
Update on financial and strategic measures announced in 2015
- Refinancing successfully completed
- Approval of General Meeting of Shareholders for €20 million rights issue in 2015
- Agreements with project partners to reduce interests in major infrastructure projects A15 and A2 are expected to be signed in third quarter of 2015.
- Announcement Public offer Renaissance Construction for issued and outstanding share capital Ballast Nedam
With a separate, jointly press release Renaissance Construction and Ballast Nedam have announced this morning that they have reached conditional agreement on a public offer of Renaissance Construction for all issued and outstanding depositary receipts in the capital of Ballast Nedam. The public offer will be further explained in the press and analyst’s meetings scheduled later today.
Key figures
x EUR 1 million first half year 2015 first half year 2014 2014
Revenue 420 515 1166
EBIT -10 -45 -65
Margin (2.4%) (8.7%) (5.6%)
Profit before income tax -15 -50 -69
Profit for the period -15 -51 -103
Order book 789 1188 1026
Shareholders' equity -1 36 11
Solvency 0 0.04 0.02
Financing position -48 -116 38
Ballast Nedam had a loss-making first half-year with a negative operating result (EBIT) of €10 million, including €4 million of restructuring costs, €1 million book profit on the disposals of the interests in the Benelux Secondary PPP fund and the Zaanstad Penitentiary (Pi2) PPP project. The result also includes non-recurring income of €3.2 million in respect of an earn-out fee relating to the sale of Ballast Phoenix Ltd in 2014.
A positive development is that the expected losses on the A15 Maasvlakte-Vaanplein and A2 Maastricht projects did not rise further in the first half of the year from the end-2014 level and that the Infrastructure division faced no further major setbacks in terms of project results. The Erasmus Medical Center project in Rotterdam made a positive contribution during the first half of the year. The negative operating result was caused partly by a loss of €1.4 million on the Nobo Otrobanda Hospital project in Curaçao, in which the divisions Infrastructure and Building & Development participate, and the settlement of the claim on the OVT Breda project amounting to €1.5 million negative. The South and North/West areas of the Building & Development division also recorded disappointing project results. In the Infrastructure division the result was adversely impacted by insufficient coverage of overheads as a result of lower revenue in the first half of the year. The Specialized Companies & Supplies division performed as expected, despite capacity utilization problems in the concrete factories.
Revenue in the first half of 2015 decreased by 18% compared to the first half of 2014 to €420 million, due to lower revenue from the Infrastructure and Specialized Companies & Supplies divisions.
Few new projects were acquired in the domestic market during the past half-year. The Nieuwbouw Erasmus MC construction consortium, a joint venture between Ballast Nedam and BAM, did nevertheless win an additional contract for the final part of the new building for the Erasmus Medisch Centrum. Gebouw RG (the thoracic centre) consists of a basement and a further 11 floors and a gross floor area of approximately 17,500m². This contract has a total value of approximately €40 million. The contracts awarded to the Building & Development division on a final or provisional basis have not yet been entered in the order book.
Solvency decreased to zero. The completion of the rights issue will lead to an improvement in solvency in the second half of 2015.
Refinancing successfully completed
Ballast Nedam completed the formalization of the refinancing on 17 June 2015. The refinancing took place with the cooperation of the banking syndicate consisting of ING Bank, Rabobank, the Royal Bank of Scotland and Sanderink Investments B.V. The financing is subject to three financial covenants which will be measured quarterly from the third quarter of 2015: a guarantee capital floor, a net cash floor and an EBITDA floor.
- Guarantee capital floor: shareholders’ equity plus the subordinated loans;
- Net cash floor: own freely available liquid assets netted against the drawn credit facility;
- EBITDA floor: EBITDA corrected for impairments, book profits and losses and restructuring costs.
Approval of General Meeting of Shareholders for €20 million rights issue in 2015
On 29 June 2015 the General Meeting of Shareholders approved the rights issue and an amendment to the articles of association reducing the par value of the shares from €1.00 to €0.01. This reduction is necessary in order to achieve maximum flexibility for the success of the rights issue. Subject to what is stated in the press release on the intended public offer, Ballast Nedam will conduct this rights issue in the second half of 2015, with tradable rights being offered to existing holders of depositary receipts to subscribe for depositary receipts for shares totalling €20 million. Sanderink Investments B.V. will underwrite the rights issue for an amount of €10 million and granted a bridge loan for this purpose in July 2015.
In connection with the intended public offer, the volume underwriting commitment for this rights issue will be extended until 31 December 2015, so this rights issue can still proceed if the intended public offer will not be successful.
Agreements with project partners signed in third quarter of 2015
Ballast Nedam will actively scale back its interests in existing large-scale infrastructure projects to further reduce its risk profile. The transactions announced in April 2015 for the A15 Maasvlakte-Vaanplein and A2 Maastricht projects were recently finalized and are expected to be signed in the third quarter of 2015:
- A15 Maasvlakte-Vaanplein project: economic and legal interest reduced from 40% to 10%.
Agreement has been reached with Strukton and Strabag, partners in the A15 Maasvlakte-Vaanplein project, under which Ballast Nedam will reduce its share of the project on signing of the agreement from 40% to 10%. Strukton and Strabag are each increasing their share to 45%. This change will be effective in the second half of 2015. Ballast Nedam will pay €4 million to Strabag and €6 million to Strukton in 2016 as a risk premium. The transaction will have a positive impact of around €13 million on balance on capital and results in the second half of 2015.
- A2 Maastricht project: transfer of infrastructure part to Strukton; transfer of property development to Ballast Nedam.
Agreement has been reached with Strukton, our partner in the A2 Maastricht project, for the takeover of Ballast Nedam’s share in the infrastructure activities in the project. Strukton’s share in the property development of the A2 Maastricht project will be transferred to Ballast Nedam. Ballast Nedam will pay its share of 50% of the project loss, i.e. €22 million, to Strukton. This payment will be spread over the second half of 2015. Ballast Nedam will acquire the right to the land positions for the property development and on completion of the tunnel will pay approximately €40 million to Strukton, for which external financing will be sought. The transaction will have no impact on assets and results in the second half of 2015.
INFRASTRUCTURE DIVISION
Infrastructure
x EUR 1 million first half year 2015 first half year 2014 2014
Revenue 81 186 458
EBIT -9 -59 -59
Margin (11.1%) (31.7%) (12.9%)
Order book 484 488 559
Assets 93 263 116
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