Ballast Nedam Half-Year Figures 2009: Low First Half-Year Result, Result Forecast for 2009 Under Pressure, Well-Filled Order Book
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July 10 Ballast-Nedam
- Low operating results in 1st half year: EUR 4 million (1st half 2008:
EUR 13 million)
- 1st half-year revenue up: EUR 601 million (1st half 2008: EUR 575
million)
- Order book up in 1st half year: EUR 1.9 billion (end 2008: EUR 1.7
billion)
- Net result for 1st half year: break even (1st half year 2008: EUR 7
million)
- 2009 results forecast under pressure: operating result forecast remains
at approximately EUR 25 million, with a range of EUR 20 million to EUR
26 million.
Key figures
1st half Full
year
x EUR 1 million 2009 20082008
Revenue 601 575 1 426
EBIT 4 13 42
Margin 0.7% 2.3%2.9%
Result before tax 1 10 31
Net result -7 24
Orderbook 1 9101 640 1 667
Shareholders' equity 160 165 168
Capital ratio16% 17% 17%
Net financing position( 145) ( 102) ( 41)
Low result for first half of 2009
Ballast Nedam's operating result in the first six months of 2009 was a
low EUR 4 million on revenues of EUR 601 million. The operating result was
below our expectations for the first half year. The results of the
construction companies in particular were under considerable pressure. The
margin fell from 2.3% in the first half of 2008 to 0.7% in the same period of
2009.
The results forecast for full-year 2009 that was published in March 2009
is now more difficult due to the continuing pressure on the results of the
construction companies in the second quarter. The Board of Management is
maintaining its forecast for an operating result of approximately EUR 25
million for 2009. In addition, the forecast now provides for a range of EUR
20 million to EUR 26 million on lower revenues than in 2008.
Financial results
Segmentation
Revenue
1st half Full year
x EUR 1 million20092008 2008
Infrastructure 300 282 708
Building and Development310 296 735
610 5781 443
Other / elimination( 9)( 3)( 17)
601 5751 426
Revenues rose by 5% to EUR 601 million.
Infrastructure
The Infrastructure division's revenues rose slightly compared to the
first half of 2008 to EUR 300 million. The division achieved a higher result
than in the first half of 2008.
The volume in the infrastructure market remained satisfactory in nearly
all segments. There had, however, already been a decrease in the prefab and
raw materials markets. Not until next year, positive effects are expected due
to the government's accelerated implementation of infrastructure projects.
This should help compensate for some of the negative effects of the downturn
in the economy.
Price levels in the public tender market for traditional contracts are
too low and remain under pressure. The regional companies were unable to
provide a positive contribution to the half-year results due to these
depressed price levels and as a result of normal seasonal patterns. Major
projects and specialized companies did contribute significantly to the
operating result. The prefab and raw materials companies contributed
positively to the result on lower revenues compared to the first half of
2008. We sustain our earlier forecast for the Infrastructure division for a
nearly stable operating result on comparable revenues for all of 2009.
In the first half year, the Infrastructure division was successful in
implementing the strategy of acquiring projects with a new contract form and
in strengthening its position in the raw materials extraction sector.
The division will develop a new P+R facility for the municipality of
Rotterdam, consisting of 860 parking spaces and with a direct connection to
the A16 motorway. This design and construct contract was awarded to the
division largely due to the quality and design of the car park. The contract
is worth approx. EUR 30 million. In a consortium we were also awarded a
contract for the design, construction and related maintenance work for the
diversion of the N322 road between Beneden Leeuwen and Druten. The Province
of Gelderland reviewed our plans particularly for quality requirements, given
the available budget of EUR 27 million. Recently, the Avenue2 consortium
consisting of Ballast Nedam and Strukton was awarded the appealing A2
Maastricht project on quality requirements. The integrated solution provides
for four tunnels stacked in a 2x2 arrangement over a distance of 2.3 km. The
bottom two tunnels are intended for through traffic, the upper two tunnels
for local traffic. The tunnels will be covered by a tree-lined lane at street
level. Approximately 1 100 housing units and 30 000 m2 of commercial space
will be developed in the immediate vicinity. The project will continue until
2027 and is budgeted at about EUR 750 million.
The division has strengthened its position in the raw materials
extraction sector through its 47.5% participation in a sand quarrying venture
in the province of Drenthe for about 10 million tonnes of sand. The division
has taken initiative for the creation of a unique nature reserve in the Lus
van Linne area, an arm of the River Meuse near the city of Roermond, through
additional gravel extraction. 148 hectares of land were acquired in the first
half year.
There will be some reorganization at a number of prefab and regional
companies later this year in response to the lower revenue forecast.
Building and Development
The revenue of the Building and Development division increased by EUR 14
million to EUR 310 million. The increase in the construction companies'
revenues exceeded the sharp decline in revenues from property development.
The Construction and Development division achieved a break even result, which
was considerable lower than in the first half of 2008. The result fell short
of our expectations.
The construction and real estate sector has been hit hard by the economic
crisis. The current decrease in volume will continue in the period to come.
We expect stability in the volume of utilities construction generated by
public and semi-public contracts. The housing market will remain stagnant due
to the drop in consumer confidence and the limited availability of financing.
The expected decrease in the number of new housing units will lead to an
increase in the structural shortage of housing, both in quantity and quality.
We therefore continue to be positive about the housing market in the
Netherlands for the long term.
The construction companies had not yet contributed positively to the
operating result in the first half year. Property development had a
significantly lower operating result compared to the first half of 2008, but
the result was still positive. Both prefab companies in this division even
had excellent results on lower revenues compared to the first half of 2008.
For full-year 2009 we expect a lower operating result on lower revenues than
in 2008 for the Construction and Development division. This is due to the
stagnation in the real estate market and the continuing pressure on the
operating results of the construction companies.
Our activities in housing construction decreased sharply in the first
half of 2009. Just one subproject consisting of 44 housing units was begun
this year as part of our own real estate development activities. Sluggish
presales delayed the start of construction of a number of projects. A number
of projects have been scaled down and redesigned to increase appeal in the
more affordable segment. The total number of housing units under construction
fell by 18% from 3 217 at the end of 2008 to 2 643. The number of housing
units under construction as part of our own real estate development efforts
decreased from 911 at the end of 2008 to 738 in June 2009. Unsold housing
stock remained nearly unchanged compared to the end of 2008. The stock is
currently 10 housing units and 712 m2 of leased commercial space. At the end
of 2008 it consisted of 11 housing units and 712 m2 leased commercial space.
The number of unsold housing units under construction amounted to 210 units.
About 25% of the marketing risk was shared in one way or another with other
parties. There is also 2 877 m2 of unsold commercial space under construction
which has been leased for 10 years. The worst-case scenario is that none of
the current stock under construction will be sold. In case this scenario
would occur, completing construction of the unsold stock will require about
EUR 35 million, half of which will be charged in 2009. There are financing
facilities available to cover this eventuality. The development potential of
the land bank is practically unchanged and amounted to 14 800 housing units.
The book value of the land bank increased by EUR 8 million to EUR 150
million. The increase was largely to be found in existing land positions.
In the first half year, the Building and Development division was
successful in implementing the strategy of strengthening its development
potential and focussing its activities on niche markets, such as high-rise
construction and the healthcare sector.
Ballast Nedam participates in the consortium that recently signed an
agreement with the municipality of Alkmaar for the innercity redevelopment of
'Overstad', an industrial area up to 32 hectares. The Building and
Development division will also start the long term property development of
the A2 Maastricht project.
In a consortium, Ballast Nedam was awarded a contract for the
construction of the university medical centre Erasmus MC in Rotterdam. The
EUR 449 million healthcare project entails the construction of a building of
185 000 m2, and will be completed in stages until 2017.
An innovative concept has been developed under the name of 'IQ-woning'
for the production of pre-fabricated and affordable quality housing, offering
consumers a choice of finishing materials. A manufactured frame is delivered
to the site ready-to-go. The individually tailored finishing touches are
applied at the site.
There will be some reorganization in property development and in the
construction companies in the North later this year in response to the lower
revenue forecast.
EBIT
1st half Full year
x EUR 1 million20092008 2008
Infrastructure7 520
Building and Development - 1129
7 1649
Other ( 3)( 3) ( 7)
4 1342
The operating result fell from EUR 13 million in the first half of 2008
to EUR 4 million in the same period this year. The Infrastructure division
improved its result by EUR 2 million to EUR 7 million. The operating result
for Building and Development fell by EUR 11 million to the break-even point.
The result for 'other' is virtually unchanged from last year and relates
mainly to head office expenses.
Margin
1st half Full
year
2009 20082008
Infrastructure2.3% 1.7%2.8%
Building and Development 0.0% 3.6%3.9%
Total 0.7% 2.3%2.9%
The overall margin fell from 2.3% to 0.7% at a 5% increase in revenues.
The margin of the Infrastructure division increased from 1.7% to 2.3% on
increased revenues. The margin of Building and Development declined from 3.6%
to 0%, reflecting the break-even result.
Net result
1st half Full year
x EUR 1 million20092008 2008
EBIT 4 13 42
Net financial income and ( 3)( 3)( 11)
expense
Profit before tax 1 10 31
Tax( 1)( 3) ( 7)
Net result- 7 24
The interest item was unchanged in the first half of 2008 and amounted to
EUR 3 million. The interest item consisted of interest expenses of EUR 4
million and capitalized interest on PPP receivables of EUR 1 million. The
result before tax amounted to EUR 1 million and EUR 9 million was lower than
last year. Taxes amounted to EUR 1 million because not all positive results
could be compensated within the fiscal entity. The net result decreased by
EUR 7 million in the first half of 2008 to the break-even point.
Order book
1st half Full year
x EUR 1 million2009 2008 2008
Infrastructure 772 786 705
Building and Development 1 182 8731 005
1 9541 6591 710
Other / elimination ( 44)( 19)( 43)
1 9101 6401 667
The order book grew by 15% in the first half year from EUR 1 667 million
to EUR 1 910 million. Both divisions succeeded in acquiring major projects.
The A2 Maastricht project recently awarded has not yet been included in the
order book.
Equity and cash flows
Shareholders' equity decreased by EUR 8 million on year end 2008 and
amounted to EUR 160 million. This decrease is due to a dividend payment of
EUR 12 million and an after tax gain of EUR 4 million from the reserve for
hedging interest rate derivatives. The hedging reserve relates to the
interest rate derivatives that convert the variable rate of the PPP loans
into a fixed rate. The reserve amounted to EUR 10 million in June 2009. Total
assets increased by EUR 23 million to EUR 1 027 million. Solvency declined
from 17% at the end of 2008 to 16% due to the increase in assets and a
decrease in shareholders' equity. Capital employed increased from EUR 252
million at the end of 2008 to EUR 332 million, in particular due to the
increase in working capital required for infrastructure projects and the
growth of PPP receivables. The negative cash flow for the first half of 2009
was EUR 76 million, compared with a negative cash flow of EUR 43 million in
the same period in 2008.
The operating cash flow for the first half of 2009 was EUR 52 million
negative in spite of increased prepayments, compared with a operating cash
flow of EUR 17 million negative in the same period in 2008. This was
especially due to the sharp decrease in creditors compared to year end 2008.
The negative cash flow from investment activities amounted to EUR 45
million negative, consisting of EUR 50 million in investments and EUR 5
million in disposals. The investments consisted of EUR 13 million for
tangible fixed assets, EUR 32 million for financial assets and EUR 2 million
for acquisition of subsidiaries. The net investments in tangible fixed assets
of EUR 11 million exceeded depreciations of EUR 9 million. The investments in
financial assets consisted of EUR 32 million in PPP receivables.
The positive cash flow from financing activities of EUR 21 million
consisted of EUR 34 million net take-up of long-term loans, a EUR 12 million
dividend payout for 2008 and EUR 1 million for buy-back of shares.
Net financing position
1st halfFull year
x EUR 1 million2009 2008 2008
Net cash 16 992
Current portion of long-term ( 1) ( 1) ( 7)
loans
Long-term loans ( 160)( 110)( 126)
( 145)( 102) ( 41)
The net financing position decreased by EUR 43 million from EUR 102
million at the half-year end of 2008 to EUR 145 million, of which EUR 41
million due to the increase in PPP loans. There is a greater need for
financing during the course of the year than at year end. Net cash decreased
by EUR 76 million since year end to EUR 16 million. Prepayments on projects
increased from EUR 79 million at the end of 2008 to EUR 109 million in June
2009. Long-term loans increased by EUR 34 million from EUR 126 million at the
end of 2008 to EUR 160 million. This increase was due primarily to EUR 30
million in long-term PPP loans. Based on the current portfolio of PPP
projects, PPP loans will increase to approx. EUR 100 million by the end of
2009 and amount to EUR 200 million at the end of 2010.
Financing
There will be no need to refinance long-term loans for the next few
years. The term of the general loan of EUR 50 million expires on 1 April
2012. It has a fixed rate of 4.63%. As security for the loan, mortgages were
taken out on a number of properties in use by Ballast Nedam. The terms of the
loan also do not include any financial covenants. The other large loan of EUR
33 million is to finance a number of land positions in a separate company.
The term of this loan runs until October 2012 and the interest is the Euribor
rate plus 100 base points. The relevant land positions serve as security for
the loan. The other long-term loans of EUR 77 million consist of EUR 53
million for the non-recourse PPP loans, and a rate that is fixed by means of
derivatives.
Ballast Nedam's shares
The net result per ordinary share in issue fell from EUR 0.71 in the
first half of 2008 to EUR 0.02. The number of outstanding ordinary shares
amounted to 9 835 115. In June 2009 the number of outstanding ordinary shares
amounted to 9 799 980.
Strategy
The most important strategic key points of Ballast Nedam in 2009 are:
Increase the value of the company by further improving its operational
performance ('operational excellence') and by increasing the structural
margin by adjusting the company's mix of activities: proportionately more
development and more management of maintenance and operations in construction
and intensified activity in niche markets (such as offshore wind farms,
industrial construction, international projects, large-scale complex
projects, high-rise construction and CNG stations). A top priority for 2009
is improving the operational performance of the regional companies.
Strengthening the front and back end of the horizontal value chain by
acquiring land positions and intensifying our activities in the field of
project development, by improving management of maintenance and operations
and by standing out in the PPP market. We will exercise restraint when it
comes to investments in new land positions in 2009.
Strengthening the suppliers in the vertical value chain by expanding the
product range and developing the specialist companies; also by further
improving operational performance of the prefab companies and by replacing
and potentially expanding our position in the raw materials extraction sector.
Statement of the Board of Management
The semi-annual financial report provides a true and fair view of the
assets, liabilities, financial position and operating result. The semi-annual
financial report provides a true and fair view of the company's position on
the balance sheet date, the state of affairs during the first half year and
the expected state of affairs for the remaining months of 2009. This report
has not been audited.
Risks
The most important risks are described in the Annual Report 2008. The
operating result for the remaining months of 2009 will largely depend on
developments in the housing market, the management of further operational
risks, in particular in the construction companies, and the outcome of claims
that are currently pending on several projects.
Annexes
- Consolidated balance sheet
- Consolidated income statement
- Consolidated statement of changes in equity
- Consolidated cash flow statement
- Segmentation half year 2009
- Notes to the semi-annual financial report
Consolidated
balance sheet
x EUR 1 million 14-Jun-0931-Dec-08 15-Jun-08
Non-current assets
Intangible
assets 28 25 25
Property, plant
and equipment 178 176 170
Financial assets66 36 22
Investments in
associates 1- 1
Deferred tax
assets 36 37 37
309274255
Current assets
Inventories215 199 224
Work in progress 116 127 106
Receivables320 295 292
Cash and cash
equivalents 67 109 76
718 730 698
Current
liabilities
Bank loans ( 51)( 17) ( 67)
Current portion
of long-term
loan ( 1) ( 7)( 1)
Inventories ( 23)( 29) ( 18)
Work in progress( 206) ( 141) ( 172)
Trade payables ( 230) ( 300) ( 207)
Income tax
payable -- -
Other
liabilities ( 136) ( 145) ( 156)
Provisions ( 32)( 21) ( 24)
( 679) ( 660) ( 645)
Working capital 39 70 53
348344308
Non-current
liabilities
Loans 160 126 110
Derivatives 10 15 -
Deferred tax
liabilities 33 4
Employee
benefits 34 6
Provisions 12 28 23
188176143
Total equity
Equity
attributable to
equity holders
of the parent 160 168 165
Minority
interest -- -
160168165
348344308
The remarks on pages 15 through 17 are an integral part of this
semi-annual financial report. Unaudited figures; 1st half 2009 up to 14 June
2009 (1st half 2008 up to 15 June 2008)
Consolidated income
statement
x EUR 1 million1st half Full year
2009 20082008
Revenue601 5751 426
Raw materials and
subcontractors ( 439)( 405) (1 077)
Employee benefits( 136)( 133) ( 267)
Other operating
expenses ( 12) ( 14) ( 15)
( 587)( 552) (1 359)
Share in results of
associates - --
EBITDA 1423 67
Depreciation and
amortisation ( 10) ( 10)( 25)
Impairment of tangible
and intangible assets- --
EBIT 413 42
Financial income 1 1 2
Financial expenses ( 4) ( 4) ( 13)
Netto
financieringsbaten( 3) ( 3)( 11)
(lasten)
Profit before tax110 31
Income tax (expense) /( 1) ( 3) ( 7)
benefit
Net result - 7 24
Attributable to:
Equity holders of the
parent - 7 24
Minority interest- --
Net result - 7 24
Attributable to equity
holders of the parent:
Basic earnings per0.02 0.71 2.46
share (EUR)
Diluted earnings per 0.02 0.71 2.46
share (EUR)
The remarks on pages 15 through 17 are an integral part of this
semi-annual financial report. Unaudited figures; 1st half 2009 up to 14 June
2009 (1st half 2008 up to 15 June 2008)
Consolidated statement of changes in equity
x EUR 1
million Issued Exchange
share Share Repurchased differences Associates Hedging
capital premium own shares reserves reserves reserve
31 December
2007 60 52 ( 2)- 16-
Exchange
differences -
Hedging
reserves-
Results
recognized
directly in
equity- --- --
Net result
for the year
Total result - --- --
Appropriation
of 2007
result
Dividend paid
Option scheme
Other - -- 3
15 June 2008 60 52 ( 2)- 19-
Exchange
differences ( 3)
Hedging
reserves( 11)
Results
recognized
directly in
equity- -- ( 3) -( 11)
Net result
second half
Total result - -- ( 3) -( 11)
Dividend paid
Option scheme
Other - -7
31 December 60 52 ( 2) ( 3) 26( 11)
2008
Exchange
differences -
Hedging
reserves4
Results
recognized
directly in
equity- --- -4
Net result
Total result - --- -4
Appropriation
of 2008
result
Dividend paid
Option scheme
Other - - ( 1) 2
14 Juni 2009 60 52 ( 3) ( 3) 28 ( 7)
(Continued)
x EUR 1 EquityTotal
millionattributable
Other to Minority shareholders'
reserves Result shareholders interestsequity
31 December
200719 27 172 -172
Exchange
differences - -
Hedging
reserves - -
Results
recognized
directly in
equity - -- - -
Net result
for the year 77 7
Total result - 77 - 7
Appropriation
of 2007
result 27 ( 27)- -
Dividend paid( 14)( 14) ( 14)
Option scheme-- -
Other ( 3)- - -
15 June 200829 7 165 -165
Exchange
differences( 3) ( 3)
Hedging
reserves ( 11) ( 11)
Results
recognized
directly in
equity - -( 14) - ( 14)
Net result
second half 17 1717
Total result - 173 - 3
Dividend paid
Option scheme
Other ( 7)- - -
31 December 22 24 168 -168
2008
Exchange
differences - -
Hedging
reserves 4 4
Results
recognized
directly in
equity - -4 - 4
Net result -- -
Total result - -4 - 4
Appropriation
of 2008
result 24 ( 24)- -
Dividend paid( 12)( 12) ( 12)
Option scheme11 1
Other ( 2) ( 1) - ( 1)
14 Juni 200933 - 160 -160
The remarks on pages 15 through 17 are an integral part of this
semi-annual financial report. Unaudited figures; 1st half 2009 up to 14 June
2009 (1st half 2008 up to 15 June 2008)
Consolidated cash flow
statement
x EUR 1 million1st half Full year
2009 2008 2008
Net cash - opening balance 92 52 52
Net result- 7 24
Depreciation 9 9 24
Amortisation 1 11
Impairment- --
Interest charges 4 4 13
Interest income( 1)( 1) ( 2)
Equity-settled share-based
payment transactions 1 --
Income tax (expense) /
benefit 1 37
Share in results of
associates- --
Book result on fixed
assets sold - --
Movements in other
investments - - ( 1)
Movements in other
receivables -( 1) ( 1)
Movement in work in
progress 76 41( 11)
Movement in inventories ( 22) ( 42) ( 6)
Movement in provisions and
employee benefits ( 6)( 6) ( 7)
Interest paid ( 4)( 4)( 10)
Interest received - -1
Income taxes paid ( 1)( 1) ( 2)
Movement in other working( 110) ( 27) 36
capital
Net cash from operating
activities ( 52) ( 17) 66
Intangible assets
investments( 3)( 3) ( 2)
disposals - --
Property, plant and
equipment
investments ( 13) ( 23)( 44)
disposals 2 13
Financial assets
investments ( 32) -( 14)
disposals 3 19 18
dividends received- -1
Acquisition of subsidiary ( 2)( 2) ( 4)
Cash from acquisition -
Net cash from investing
activities ( 45)( 8)( 42)
Proceeds from long-term
loans36 15 43
Repayment of long-term
loans ( 2) ( 19)( 14)
Dividend paid ( 12) ( 14)( 14)
Proceeds from repurchased
shares ( 1) --
Net cash from financing
activities 21 ( 18) 15
Effect of exchange rate
fluctuations on cash held - -1
Net cash - closing balance 16 9 92
The remarks on pages 15 through 17 are an integral part of this
semi-annual financial report. Unaudited figures; 1st half 2009 up to 14 June
2009 (1st half 2008 up to 15 June 2008)
Consolidated cash flow statement (continued)
Net cash
1st half Full year
x EUR 1 million 20092008 2008
Cash and cash equivalents 67 76 109
Bank loans ( 51) ( 67) ( 17)
16 992
Unrestricted cash balances ( 24)( 2)75
Proportionately consolidated 40 1117
16 992
Net financing position
1st half Full year
x EUR 1 million 20092008 2008
Net cash 16 992
Current portion of long-term
loans( 1)( 1) ( 7)
Long-term loans( 160) ( 110)( 126)
( 145) ( 102) ( 41)
The remarks on pages 15 through 17 are an integral part of this
semi-annual financial report. Unaudited figures; 1st half 2009 up to 14 June
2009 (1st half 2008 up to 15 June 2008)
Segmentation
Revenue
1st half Full year
x EUR 1 million 2009 2008 2008
Infrastructure300282 708
Building and Development 310296 735
610578 1 443
Other / elimination ( 9) ( 3) ( 17)
601575 1 426
EBIT
1st half Full year
x EUR 1 million 2009 2008 2008
Infrastructure 7 520
Building and Development- 1129
7 1649
Other( 3) ( 3) ( 7)
4 1342
Margin
1st half Full year
2009 2008 2008
Infrastructure 2.3% 1.7% 2.8%
Building and Development 0.0% 3.6% 3.9%
Total0.7% 2.3% 2.9%
Net result
1st half Full year
x EUR 1 million 2009 2008 2008
EBIT4 1342
Net financial income and
expense ( 3) ( 3) ( 11)
Profit before tax 1 1031
Tax ( 1) ( 3) ( 7)
Net result - 724
Segmentation half year 2009 (continued)
Order book
1st halfFull year
x EUR 1 million 2009 2008 2008
Infrastructure 772 786 705
Building and Development 1 182 873 1 005
1 954 1 659 1 710
Other / elimination ( 44) ( 19) ( 43)
1 910 1 640 1 667
Cash flow from operating
activities
1st halfFull year
x EUR 1 million 2009 2008 2008
Infrastructure ( 38) ( 12)46
Building and Development ( 9) ( 11)26
( 47) ( 23)72
Other ( 5) 6 ( 6)
( 52) ( 17)66
Cash flow from investing
activities
1st halfFull year
x EUR 1 million 2009 2008 2008
Infrastructure ( 27) ( 7) ( 39)
Building and Development ( 18) 4 ( 6)
( 45) ( 3) ( 45)
Other- ( 5) 3
( 45) ( 8) ( 42)
Assets
x EUR 1 million 14-Jun-09 31-Dec-08 15-Jun-08
Infrastructure 452 435 482
Building and Development 547 491 488
999 926 970
Other 272734
1 026 953 1 004
Notes to the semi-annual financial report
Significant accounting policies
Ballast Nedam N.V. is established at Nieuwegein in the Netherlands. The
semi-annual financial report of Ballast Nedam NV covers the first six period
of the 2009 fiscal year from 1 January 2009 to 14 June 2009 (2008: 1 January
1 to 15 June). This report includes Ballast Nedam NV, head of the group and
its subsidiaries, collectively called Ballast Nedam and Ballast Nedam's
participation in associated businesses and entities that are controlled
jointly. The consolidated financial statement of Ballast Nedam NV for the
year 2008 is available through http://www.ballast-nedam.nl.
Statement of compliance
The semi-annual financial report has been prepared in conformity with
International Financial Reporting Standards IAS 34 "Interim Financial
Reporting" as adopted by the European Union (hereinafter: 'EU-IFRS'). This
report has not been audited. The semi-annual financial report does not
contain all information required for complete annual financial statements and
should be read in conjunction with the consolidated financial statements for
the year 2008.
This half-yearly financial report was prepared and approved by the Board
of Management on 9 July 2009.
Accounting policies used in the preparation of the semi-annual financial
report
The semi-annual financial report has been prepared in accordance with the
financial reporting principles as used for the 2008 financial statements. The
following amendments have been made since 1 January 2009.
IAS 1 Presentation of Financial Statements (revised)
One of the IASB projects focuses on improving presentation in the
financial statements and the main tables. The changes are limited to the
presentation of the summary of financial movements of the total result.
IAS 23 Borrowing Costs (revised)
The revised standard no longer permits recording finance expenses related
to the construction or acquisition of an asset as a direct loss. Instead,
finance expenses have to be capitalized. Ballast Nedam capitalizes financing
expenses for qualifying assets for which the time needed to prepare the
assets for sale is of a longer term nature. The implementation of this
standard has had no material impact on the comparative figures or the equity
of Ballast Nedam.
IFRS 8 Operating Segments
The segmentation in this semi-annual financial report is consistent with
that used by management for internal purposes. The implementation of this
standard has had no material impact on the comparative figures or the equity
of Ballast Nedam.
IFRIC 15 Agreements for the Construction of Real Estate
IFRIC 15 concludes that housing projects will often not qualify as
contracts on behalf of third parties (construction contracts), because the
design and the major specifications of the housing units have not been
specifically negotiated with the buyer. Ballast Nedam records the revenues
from the relevant housing projects in accordance with the provisions of IAS
18. The implementation of this standard has had no material impact on the
comparative figures or the equity of Ballast Nedam.
Seasonal Patterns
Ballast Nedam's activities are subject to seasonal patterns. In general,
the majority of production takes place in the second half of the year.
Acquisition of subsidiaries
An agreement was reached in 2009 on the indirect acquisition of Plegt Vos
Zandwinning B.V. The transfer of shares of Plegt Vos Zandwinning B.V. to a
consortium in which Ballast Nedam has a 50% stake was effectuated on 23 April
2009. This company will be called Noord Nederlandse Zandwinning B.V. It is
active in the field of sand and gravel extraction. The purchase price was
less than EUR 2 million. Purchase price allocation will take place in the
second half of 2009.
Transactions with associated parties
The parties associated with Ballast Nedam are its key management (Board
of Management/Supervisory Board), its subsidiaries, associates, joint
ventures, Stichting Pensioenfonds Ballast Nedam Pension Fund and their
managers and senior officials of these companies. The main task of the
Ballast Nedam Pension Fund is to implement the pension scheme for the
employees of Ballast Nedam. Ballast Nedam Pension Fund makes use of the
services of employees of Ballast Nedam companies. Actual expenses are charged
on. Ballast Nedam buys and sells goods and services to various associated
parties in which Ballast Nedam holds an interest of 50% or less. These
transactions are conducted on commercial terms similar to those for
transactions with third parties.
Interests in joint ventures
Joint ventures, consisting primarily of construction or development
consortia, are consolidated on a proportional basis. For a list of the main
joint ventures, please see the organizational chart in the annual report.
Ballast Nedam has recognized the following interests in joint ventures in the
consolidated balance sheet.
Interests in joint
ventures
x EUR 1 million 14-Jun-09 31-Dec-08
Non-current assets 81 43
Current assets 176 126
Non-current liabilities ( 75) ( 32)
Current liabilities ( 154) ( 110)
Balance of assets and 28 27
liabilities
The proportionally consolidated revenue and the cost of sales amounted to
about 16% (2008: 13%) of total revenues and cost of sales.
The total liabilities to third parties of companies for which Ballast
Nedam holds joint and several liability, such as partnerships, excluding bank
guarantees issued by those companies, amounted to EUR 637 million as of
balance sheet date (EUR 417 million at year end 2008), of which the EUR 229
million portion of Ballast Nedam (EUR 142 million at year end 2008) is
included in the consolidated balance sheet.
Segmented information
The amounts for transactions between segments are determined on an arm's
length basis. The results, assets and liabilities are determined in
accordance with the financial reporting principles as used for the financial
statements.
Estimates and judgements by management
In preparing the semi-annual financial report, management of Ballast
Nedam has made estimates and judgements which affect the amounts recognized
for assets, liabilities, revenue, costs and the related remarks.
Project results
The valuation of work in progress is based on forecasts of the final
project results. The ultimate outcome may differ from these forecasts.
Recognition of income tax
Ballast Nedam makes an assessment of the tax position of all fiscal
entities at the end of each period. This involves making estimates of the
actual short-term tax charges and income as well as of the temporary
differences between the fiscal valuation and carrying amounts of assets and
liabilities for financial reporting purposes. A decision is taken on the
balance sheet date as to whether unused tax losses and deferred tax assets
due to temporary differences may be recognized. Ballast Nedam recognizes
deferred tax assets if these are likely to be realized. If the actual
anticipated taxable profits differ from the estimates, and depending on the
tax strategies which Ballast Nedam may introduce, capitalized unused deferred
tax assets which have been recognized may not be realized, thus affecting the
financial position and results of Ballast Nedam.
Provisions
Provisions relating to actual obligations are based on estimates and
judgements as to whether the criteria for treatment as a provision have been
met, including an estimate of the size of the actual obligation. Actual
obligations are disclosed if it is likely that an obligation will arise and
its size can be reasonably estimated. If the actual outcome differs from the
assumptions as to anticipated costs, the estimated provisions will be
revised, and this could have an effect on the financial position and results
of Ballast Nedam.
Post-balance sheet events
No noteworthy events that could affect this semi-annual financial report
occurred after the balance sheet date.
Board of Management
T.A.C.M. Bruijninckx
R.L.M. Jacobs
R. Malizia
SOURCE Ballast Nedam NV
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