Royal IHC reported today that 2018 was a difficult year and due to cost overruns in the execution of a number of challenging innovative projects, the loss for 2018 ultimately amounted to €80.6 million.
IHC has initiated a number of clear actions in order to restore profitability.
For example, the organisation has applied focus to – and accelerated – the transformation that has already begun by concluding contracts under better conditions, and strengthening its management and improving processes, among others, IHC’s report reads.
At the same time, the company has been reinforced with €120 million in additional financing.
Commenting the latest news, IHC’s CEO Dave Vander Heyde said: “We’re convinced that, after a difficult period, we have taken the right steps and necessary measures to safeguard our quality, innovative strength and strong relationships that have made IHC a leading player in its market for the future.”
“The trust and commitment we have received from our stakeholders underlines the support for our strategy, which is now bearing fruit in a high-quality order book. This lays the foundation on which IHC can achieve a positive result in 2019.”
The result for 2018 was strongly influenced by a number of challenging innovative projects that were contracted in the market during the earlier crisis period (2015-2017).
These projects are now in the final phase, but with significant cost overruns. For the 2018 financial year, this ultimately led to a negative EBITDA of €40.8 million and a net loss of €80.6 million, said IHC.
The order book at 31 December 2018 was €1,184.5 million, which is lower than a year earlier.
The newly signed orders in 2018 amounted to €594 million. These orders have a lower risk profile and have been concluded under better conditions, which means that they will already have a positive impact on the result in 2019. The revenue for 2018 was 18% higher at €941.7 million (2017: €800.2 million).
A higher turnover is expected for 2019 alongside a turnaround of the operational result.