While BESIX Group had to suffer a financial setback in 2015 caused by the adverse impact from the operational losses in the Kingdom of Saudi Arabia and Egypt, we have risen to unprecedented heights in 2016.
BESIX Group demonstrated its resilience and achieved a major turnaround in 2016 with a net result of 120.8 million €, against 3.8 million € in 2015. Record results in Contracting, BESIX Red and Concessions & Assets contributed to this solid performance, with an overall profit margin that exceeds 5%.
Our Regional Contractors posted an excellent performance taking into account the challenging market environment in which they operate, combined with increased competition in the private sector.
BESIX Group’s consolidated net cash position amounted to 319.2 million € (excluding the impact of real estate debt), an increase of 153 million € as compared to 2015, demonstrating a healthy liquidity position. The Group's solvency ratio rose to 27.3 %, which is well in excess of the minimum industry standards.
Recording a year-on-year increase of revenues of 6.6%, the Contracting activities of BESIX delivered an excellent performance with a net result of 87.1 million € against -30.1 million in 2015, boosted by the strong results in Europe and the Middle East.
Europe’s results improved significantly year-on-year, due mainly to a strong performance in France after a difficult year in 2015. In Belgium, BESIX completed Docks Bruxsel, a new shopping center along the Brussels canal. We also delivered the Wilfried Martens building, a new office building for the European Parliament as well as Cadiz Residence, a multifunctional complex in the historic port district of Antwerp. In the Netherlands BESIX completed the renovation works of the Velsertunnel (west of Amsterdam) in hardly 6 months time and the station hall of OVT Utrecht, the result of 6 years of Belgian-Dutch co-operation.
Our activities in the Middle East posted a further increase of revenues and profitability, whereby the United Arab Emirates were the driving force of this growth with more than 20 projects ongoing in the region. In 2016, Six Construct handed over major projects such as Adnoc Headquarters, the works for the iconic Dubai Canal as well as Legoland Theme Park.
In Qatar, we focused on the execution of our ongoing projects: Al Rayyan Road (which has just been completed), the expansion and renovation of the Khalifa Stadium, the extension of the sewerage treatment plant in Industrial Area in the South West of Doha and the Aprons for Qatar Airways.
Results were also positively impacted by the decision to withdraw from the Jazan Marine Terminal and Sail Tower projects in the Kingdom of Saudi Arabia, after reaching an agreement with the client on reasonable terms.
Building International improved, which was largely due to solid performance in Switzerland and Montenegro. In Andermatt, Switzerland, BESIX, together with Orascom, is currently building Gotthard Hotel and Residences, a luxury resort that will be operated by Radisson Blu. Lustica Bay is another luxury development project located in Montenegro, for which BESIX, after completing Phase II of the project in 2016, has won the design and build contract for the third Phase.
In Egypt, we completed works for the Mall of Egypt. The on-going works on the Grand Egyptian Museum are expected to be completed in the course of 2018.
BESIX Red, our real estate affiliate, posted a record net profit of 13.7 million €, with Luxembourg as the main driver. In Luxembourg BESIX Red pursues its strategy of a balanced mix between residential and office buildings. With the development of the global headquarters of FERRERO the real estate entity of BESIX adds another landmark project to its track record.
In Belgium activities remain focused on residential developments in Brussels, such as Canal District. The ENSOR and DELVAUX residences in Woluwe-Saint-Lambert were successfully delivered.
The Concessions & Assets contributed to the result for 21.8 million €, a 75% increase year-on-year. Concessions & Assets also benefit from pursued growth in the European PPP market, most notably in the Netherlands, where BESIX was awarded the contract for the design and construction of the Beatrixsluis and the widening of the Lekkanaal as a member of the consortium Sas van Vreeswijk.
In January 2017 Rik Vandenberghe, former CEO of ING Belgium, was presented as CEO of the Group, effective 3 April.
Building further on the strong position of the contracting business will be key to the future success of the company. As a second spearhead in its development strategy BESIX wants to further expand its offerings by entering new regions, markets and products. With the nomination of Rik Vandenberghe as CEO from outside the construction world, BESIX demonstrates its ambition to break new ground and forge new paths. Johan Beerlandt has accepted the nomination as Chairman of the Board of Directors of BESIX Group.
Johan Beerlandt states: “I look back on twelve fulfilling years of leading the group and am thrilled that I can pass on the torch at a moment when the group records a historically high result. The nomination of Rik, who has built up extensive experience outside the construction industry, confirms our ambition to break new ground and explore new ways to take our business further. He has my full support to make his mission a success. In my new role of Chairman of the Board of Directors I will secure what is close to my heart: safeguarding the Belgian identity and DNA of the Group as well as a stable shareholding.”
Rik Vandenberghe states: “I am delighted that I can lead a Belgian company of this stature, which has tremendous entrepreneurship and talent on board. I am determined to lead the contracting activities on a continued path of growth and profitability. Joining at a time when the company shifts to a higher gear in terms of diversification, both geographically and product-wise, opens up a lot of opportunities which I am keen to seize, together with the BESIX teams. With the strong foundations laid I am confident that BESIX has a great future ahead.”
In 2016 BESIX realized a major breakthrough in its attempts to enter the Scandinavian market as we were awarded our first civil works contract in Denmark. The Fjordverbindelsen Roskilde is a Design & Build project near Copenhagen that consists of the construction of a new 4 lane dual carriageway over a distance of 8,2 km. The project includes a 1.4 km tolled high bridge over the fjord and 11 smaller civil structures (bridges, fauna passages, cycle lane passages).
On 7 February 2017 BESIX acquired the shares of the Heijmans activities in Belgium with Heijmans Infra NV, Van den Berg NV and Heijmans Bouw NV as major entities. This represents a major acquisition for BESIX adding no less than 250 million euro in revenues. Furthermore it enables BESIX Group to enhance its position in the Flemish part of Belgium, as the Heijmans network offers a perfectly complementary regional span. The acquisition also allows us to further diversify our offerings, most notably in road-building, complex infrastructure works and cable and pipeline construction. The acquired companies are all active in industries which will demonstrate strong growth in the coming years in order to support the Belgian economy: mobility, smart networks and healthcare. The acquisition is still subject to approval from the regulatory authorities.
The order book stands at 2930 million € end of December compared to 3220 million € the previous year. The decrease is the result of the Group’s withdrawal from projects in KSA.
Prospects in our European market are favorable. In the course of 2016 and early 2017 BESIX could secure multiple contracts, such as the DBFM contract for the 3rd chamber of the BEATRIX lock and the widening of the Lekkanaal in Nieuwegein and works on the Almere A6 Road, both commissioned by Rijkswaterstaat. BESIX is also renewing its building activities in the Netherlands through the award of the design, construction and 15 year maintenance contract of Hogeschool Utrecht. In Belgium BESIX will build the new Headquarters of BNP Paribas in Brussels in joint venture.
Development in the Middle East region has clearly been relaunched seeing Six Construct was able to add multiple new projects to our order book, including The Royal Atlantis Resort and Residences, the high-end leisure and residential complex on Palm Jumeirah island for which works have started. We also secured the contract for the further expansion of Jebel Ali sewage treatment plant which will more than double the present capacity at completion. At year end we were awarded new projects at Masdar City, Mina Khalid in Sharjah and a first project for Expo 2020 in Dubai. Additional iconic projects are anticipated as Dubai developer Emaar Properties has awarded Six Construct with the contract to build the raft foundations for the world’s tallest building, The Tower, at Dubai Creek Harbour. We will resume operations in Bahrain in the course of 2017 with the financial close of the new off-shore LNG terminal, and by the summer of 2017 in Oman as we secured a new order for liquid berths in Duqm.
The Concessions & Assets remains a strong driver for continued net profit growth for BESIX Group. Additional development may be expected in the Middle-East region whilst growth is also pursued in our European market, especially in the Netherlands where BESIX with its consortium partners has been granted the contract for the design, construction, financing, management and maintenance of the A6 Almere highway for a period of 20 years.