“Multiconsult delivered a strong second quarter and a solid first half of 2020, with significantly improved profitability and revenue growth. We are well underway in the turnaround process that started in the first half of 2019. The improvements are a result of our focus on core business, sales and project execution, and significantly reduced operating expenses partially resulting from the nextLEVEL improvement programme.
We are also delivering solid sales resulting in a stable order backlog. While we have seen only modest impact of Covid-19 on our activity level, the pandemic is of course still creating some uncertainty. I am very impressed by the way our employees have adopted to the new working environment, and how their dedication in achieving solid and uninterrupted customer deliveries, has contributed to significant improvements.” says Grethe Bergly, CEO of Multiconsult ASA.
Second quarter 2020
Net operating revenues increased by 9.8% to NOK 951.7 million (NOK 866.7 million) compared to the same quarter last year. The increase in net operating revenues is exclusively organic. There was a calendar effect of one more working day with an impact of NOK 14.9 million.
Reported operating expenses decreased by 4.3% to NOK 799.4 million (NOK 835.4 million). Other operating expenses decreased by 13.1%, confirming that the nextLEVEL improvement programme is on track, together with the impact of lower activity cost such as travel and consultancy expenditure due to Covid-19.
EBIT was NOK 102.5 million (negative NOK 15.9 million), reflecting an EBIT margin of 10.8% compared to a negative EBIT margin of (1.8%) for the same period last year. The comparable 2019 EBIT figure includes non-recurring one-off charge of approximately NOK 20.2 million.
First half 2020
Net operating revenues increased by 7.4% to NOK 1 945 million (NOK 1 811 million) and is exclusively organic driven. There was a calendar effect of two more working days that impacted net operating revenues positively with NOK 28.3 million.
Reported operating expenses was reduced by 1.0% to NOK 1 625 million (NOK 1 641 million). Employee benefit expenses increased slightly, while other operating expenses decreased by 12.7%, partly a nextLEVEL effect, as well as impacted by lower travel costs and other costs reductions related to Covid-19.
EBIT was NOK 219.9 million (NOK 76.5 million), an improvement of 187.3% y-o-y, reflecting an EBIT margin of 11.3%. The comparable 2019 EBIT figure includes non-recurring one-off charges of approximately NOK 30.2 million.
The order backlog at the end of the second quarter 2020 remains solid at NOK 3 004 million (NOK 2 725 million), an increase of 10.2%. Order intake during the quarter increased by 14.9% compared to the second quarter in 2019.
Multiconsult is on track in the ongoing turnaround process that started in the first half of 2019, where the focus has been on the core business, sales and project execution. The nextLEVEL improvement programme is on track. The order backlog is at a solid level and provides a good foundation with a broad customer base. This is further supported by important projects awarded after 30 June 2020.
Subject to uncertainties caused by the Covid-19 situation, the market outlook for Multiconsult’s services is good across most business areas, and with a good pipeline of potential projects coming up. There are however more uncertainties in particular within buildings and properties (including architects) and in certain areas within our energy sector, where a softening of the market is expected. The pandemic continues to create uncertainty for our industry. Multiconsult has registered modest negative impact due to the Covid-19 situation. In relation to Covid-19, Multiconsult has been, and will be, taking prudent, responsible and necessary actions, to secure our people, our business, and our deliveries in close cooperation with our customers.
With a solid market position, leading competences, technology and solutions for our customers, Multiconsult believes it is well placed to handle the challenges of the current uncertainties facing the economy and our industry.