Peab, a Nordic construction company, has reported an increase in net sales, profits, and cash flow for the third quarter (Q3) of 2024.
The company's net sales reached Skr15.54bn ($1.46bn), up 5% from Skr14.74bn in the same period last year. Peab’s Construction segment saw an 11% drop in net sales for the quarter to Skr5.130bn due to less activity in new housing production.
This growth is reflected in the company's operating profit, which rose to Skr995m, marking an increase from Skr786m, and a higher operating margin of 6.4% compared to 5.3% in the previous year.
The company's pretax profit for Q3 2024 stood at Skr902m, a notable rise from Skr654m. Earnings per share also increased to Skr2.59 from Skr1.85.
Orders received during the quarter amounted to Skr10.14bn, a decrease from Skr11.03bn while cash flow before financing improved dramatically to Skr1.20bn from Skr450m.
For the period of January to September 2024, Peab's net sales were Skr41.91bn, a 3% decrease from Skr43.18bn in the previous year, attributed to the weak demand in the housing market.
Operating profit for this nine-month period was Skr1.51bn, down from Skr1.72bn in the corresponding period last year. The operating margin also saw a reduction to 3.6% from 4.0%.
The company's order backlog as of September 2024 was a healthy Skr47.03bn, up from Skr41.67bn, indicating a strong pipeline for future revenue.
The company's net debt decreased to Skr8.44bn in the nine-month period from Skr10.17bn previously, with the net debt/equity ratio improving to 0.5 from 0.7, reflecting a stronger balance sheet. The reduction in net debt resulted from a decrease in working capital and lower investments in the industrial sector.
Looking at the market and future prospects, Peab expects the Nordic construction markets to remain stable, with the civil engineering markets in particular maintaining high levels.
Meanwhile, the region's housing markets are anticipated to experience a weak recovery in the coming year due to lower interest rates.
Peab president and CEO Jesper Göransson said: “Peab reports higher net sales, strong profits and improved cash flow for the third quarter. Operations in civil engineering and paving continue to grow with profitability.
"Once again, we give proof of how well our four business areas complement each other and enable us to take advantage of the demand in our markets.”
