October 31, 2020

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Considerable loss for BAM, Boskalis stable

Considerable loss for BAM, Boskalis stable

The largest Dutch construction company, BAM, is not doing well after the last six months. There was a net loss of 235 million euros, the company has announced.

BAM had problems in several areas. According to Frans den Houter, finance director and temporarily also top boss, the loss is largely due to the corona pandemic. This prevented the company from operating at full capacity.

In April and May the company was only running at 65 percent capacity. According to the CEO, private commercial real estate developers are reviewing their construction plans, which will translate into less work in the short term. BAM’s sales in the second quarter were almost a fifth below the previous year’s figure.

That has now risen to almost 90 percent. According to Den Houter, this is partly due to government help, which means there is still work to be done on the infrastructure. “Infrastructure markets remain positive due to government investment programs to stimulate the economy.”

Disaster with subway line

When the pandemic hit the world, the construction company also had to deal with a problem from the past: the collapse of Cologne’s city archive when a new underground tunnel was built. Two people were killed and a large number of historical documents and items were damaged. A BAM operating company was one of the three parties that worked together on the subway line.

In June, BAM set up shop with the city of Cologne and the Cologne transport company for 200 million euros. Much of this amount was covered by the company’s insurance, but there is still a cost of 36 million euros that weighed on the results for the first half of the year.

It is getting less internationally

In addition, there were losses at the international branch of the construction company, which burdened the result by a further 56 million euros. BAM International has consistently lost money over the past few years and the problems in the oil industry and the low price of oil have not improved.

Since the company believes it cannot turn the tide internationally, it has decided to cease operations outside of Europe. It is not yet clear whether and how many jobs will disappear. The company is now discussing this with the works councils and unions.

Boskalis on track

The construction company Boskalis also published half-year figures today. Sales there remained almost unchanged compared to the previous year at 1.26 billion euros. The end result was a net loss of around 96 million euros. Last year there was a small profit of a million.

The loss is solely the result of the so-called high ancillary costs. For example, Boskalis ships have lost value due to the difficult circumstances of the past few months. As a result, the company had to pull almost 150 million euros of the value off the books.

However, the company has earned more from the work it has done over the past six months. As a result, net profit, excluding the aforementioned depreciation on ships, was around 48 million euros.