Good results for first half of 2009

Solid earnings – High level of orders – Confident outlook

D i e t l i k o n, 22 September 2009 – Construction services group Implenia can look back on a good first half of 2009. The operating result reached CHF 10.5 million, and the group result was CHF 6.2 million. This good performance was achieved on consolidated turnover of CHF 1040 million, which is slightly lower than the year-back figure. At end-August order books continued to look very healthy at CHF 3.2 billion. Having established this platform, we expect stable turnover for financial 2009 as a whole, as well as a slight likefor-like annual increase in the group result.

The CHF 10.5 million operating result for the first six months of 2009 (previous year CHF 23.7 million) has to be seen in context: the figure for the first half of 2008 includes CHF 13.4 million of exceptional earnings added to the total by Privera's operating results and eventual sale. A like-for-like comparison – i.e. excluding exceptional items – shows EBIT of CHF 13.6 million for the first half of 2009, which is 7% higher than the year-back figure of CHF 12.7 million.

At end-August 2009 group-wide order books were worth a total of CHF 3248 million (previous year CHF 3064 million).
These orders already guarantee around 55% of the turnover budgeted for 2010, and are spread over several years thereafter as well. This excellent figure is attributable mainly to a whole series of new medium and large-scale general contracting and construction jobs, and it reflects the confidence that customers have in our firm.

The group's net cash position at end-June was CHF 25.2 million (previous year: net debt of CHF 110.2 million). Equity came to CHF 426.7 million (previous year CHF 414.8 million), and cash flow before financing activities came to CHF -7.1 million (previous year CHF +10.6 million).

Real Estate Division
The Real Estate Division (general contracting, project development, engineering) enjoyed continuing high demand and saw orders on hand increase at end-August by 9% to CHF 1401 million (previous year CHF 1282 million). Thanks to this welcome orders situation, turnover for the financial year as a whole is expected to be at least as high as in 2008.

During the period under review, general contracting benefited from uninterrupted demand thanks mainly to continued lively residential construction activity. Project development business also performed well; results for the year as a whole will depend not least on whether specific major projects currently in the pipeline actually come to fruition. The engineering business is feeling the effects of the industrial sector's cautious approach to investment, though demand for sustainable construction is on the increase.

Infrastructure and Tunnel + Total Contracting Divisions (construction work)
The Infrastructure Division saw the backlog of orders increase significantly (30%) thanks to substantial acquisition success, while the Tunnel and Total Contracting Division maintained orders at a high level spread over several years. This resulted in total orders on hand across both divisions of CHF 1847 million spread over several years. Combined EBIT came to CHF 5.8 million. The Infrastructure Construction Division faces a tough battle on prices, which continues to put pressure on margins. Given the current recession this is likely to get even worse.

Turnover and earnings at the
Tunnel + Total Contracting Division are still good despite the Lötschberg rail project coming to an end last year.
Tunnel construction itself is enjoying a significant increase in volume and earnings.

Global Solutions Division
This division covers Implenia's foreign activities and it was inevitably affected by the problems in its target markets, Russia and the Middle East. Following detailed analysis we decided, therefore, to wind up the «Russian Land Implenia» joint venture. In the Middle East Implenia is concentrating mainly on infrastructure projects in the short and medium term, primarily in Abu Dhabi and Qatar. Owing to all the turmoil on the markets, we have decided to adjust the pace of international expansion. The recent turbulence has certainly confirmed that our deliberately low-risk entry strategy was the right one.
Renewal of syndicated loan reflects confidence in Implenia
During the period under review Implenia increased its credit limits by CHF 100 million and renewed the CHF 500 million syndicated loan that had been due to run out at the end of 2009. Consequently we now have access to credit totalling CHF 600 million over the next three years. The loan agreement concluded with a country-wide syndicate of 19 banks is a sign of broad-based confidence in Implenia Group's future.

Dispute with Laxey
Regardless of the increase in Laxey's stake in Implenia to over 50%, it must be remembered that according to FINMA and a ruling by the Federal Administrative Court, this shareholding was built up illegally. In June, Switzerland's Supreme Court issued two decrees granting Implenia full access to records in relation to an objection by Laxey. The Board of Directors is continuing to insist on an unchanged registration policy for foreign shareholders.

Positive outlook
Based on the good half-year results and the high volume and quality of outstanding orders, we expect stable turnover for financial 2009 as a whole, as well as a slight like-for-like annual increase in the group result.