Zengun Group AB started its operations on 24 May 2019 when the company acquired all of the shares in Zengun Group Holding AB (Corp. Reg. No. 559050–0699) and its wholly owned subsidiaries from Segulah Fund V.
Financial information for the former group (Zengun Group Holding AB) has been included as a basis for comparison.
ZENGUN group ab (publ)
- Net turnover amounted to MSEK 697,5.
- EBITDA totalled MSEK 35.6.
- Earnings before tax amounted to MSEK 21,3.
ZENGUN group holding ab (former group)
- Net turnover amounted to MSEK 697.5 (585.3), up 19% or MSEK 112.2
- EBITDA totalled MSEK 35.7 (26.1), corresponding to an EBITDA margin of 5.1% (4.5)
- Operating cash flow was MSEK 96.9 (51.1)
Significant events in the first quarter
- RA Bygg, a subsidiary of the Zengun Group, signed a contract in February for the construction of a school together with a sports hall for Hemsö Fastighets AB.
- In February, Zengun AB signed an agreement with Atrium Ljungberg for a remodelling and extension project at Sickla Galleria encompassing new retail and parking areas.
Significant events after the end of the first quarter
- The new corona virus and the ongoing pandemic continue to cause uncertainty in the market.
The Zengun Group is one of the leading construction contractors in Stockholm and carries out construction projects on behalf of well-known customers in the real estate industry. While the main focus is on commercial properties, the portfolio also includes residential projects and projects in the public sector. The Zengun Group is a complete supplier and partner, with a customer-centric approach. The Group has approximately 220 employees and net turnover in 2019 amounted to SEK 2.6 billion. #zengunbuildingstockholm
Financial calendar 2020
|Interim Report January–June||27 August|
|Interim Report January–September||11 November|
For more information, please contact:
Sture Nilsson, Managing Director and CEO, +46 70 580 04 15
Anna-Carin Bjelkeby, CFO, +46 70 580 62 25
Prior to publication, this information constituted insider information. This information is of such a kind that Zengun Group AB (publ) is legally required to disclose pursuant to the EU’s Market Abuse Regulation. This information was submitted through the agency of the above contacts for publication on 14 May 2020 at 7:30 a.m. (CEST).
Statement by the CEO
Strong quarter with continued growth – uncertain market trend
The Zengun Group reported a strong first quarter for 2020. We continued to post substantial growth with several of our major projects at intensive stages of production. Turnover amounted to MSEK 697.5, corresponding to year-on-year growth of 19%. We reported a stable profit margin with EBITDA of 5.1%, which entailed satisfactory earnings measured as an EBITDA of MSEK 35.6. compared with MSEK 26.1 for the same period last year.
The operating cash flow for the period was very strong and amounted to MSEK 97.6, which was a considerable improvement on last year. However, it should be noted that cash flow in the construction industry is subject to substantial swings, which means that the LTM cash flow of MSEK 140 provides a fairer image.
New project starts
At the close of the period, the order book totalled MSEK 2,140, compared with MSEK 2,300 at year end.
We started several new projects in the first quarter. We started a remodelling and extension project for Atrium Ljungberg at Sickla Galleria encompassing new retail and parking areas. We also started construction of the new school, Bagartorpsskolan in Solna, together with a sports hall for Hemsö, thus gaining a foothold in the interesting segment of public sector property.
We also have several ongoing projects at an early project planning phase, known as phase one. These include the project planning for the continued remodelling at Haga Norra in partnership with Fabege and a project start in partnership with Klövern. The forthcoming project volumes for these projects have not been included in new orders as the construction contracts have yet to be signed.
Uncertainty due to Covid-19
To date, our industry has been not been as exposed as other sectors. We have been able to continue working on projects and to keep site offices and construction sites open, albeit with somewhat higher sickness absence than normal. By and large, material deliveries to our projects have functioned well, though there have been some delays.
Zengun continues to have a high rate of production in ongoing projects. Moving forward, Covid-19 and the ongoing pandemic will also entail consequences for the construction sector. However, the exact nature of these is difficult to assess at present. On the positive side, Zengun has stable customers with long-term agendas, and moreover, our cost structure with low fixed costs makes us flexible. We are monitoring developments carefully to be able to adapt our operations to conditions and to developments in society – and will continue to help building Stockholm.
Managing Director and CEO