Further insight the €3.4m loss Royal BAM Group recorded in its UK operations – made up of BAM Construction and BAM Nuttall – could emerge in the coming weeks when both divisions publish their own results.
However, the identity of the “UK civil engineering project” at BAM Nuttall that has contributed to the loss may not be revealed.
Royal BAM Group yesterday announced that in 2014 its UK operations posted a loss of €3.4m on a turnover of €2.08bn. It also recorded a loss in Germany of €31.2m on a turnover of €904m.
The company confirmed its losses on two unnamed civil engineering projects, one in the UK and one in Germany, which were previously announced on 7 July 2014.
At the time, chairman Nico de Vries – who has since retired – said that the UK project was a “mid-sized civil engineering project bid in 2012”.
In total, the group made a pre-tax profit of €62.2m before restructuring costs on turnover of €7.3bn, helped by a strong performance in its PPP portfolio.
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Royal BAM Group companies have been undergoing the “Back in shape” programme to improve project controls and cut the group’s cost base, which appears to mirror to Balfour Beatty’s “Build to Last” initiative in many respects.
It is targeting savings of €100m, much of it from not replacing higher-earning retirees and leavers, but there has also been a programme of 650 redundancies. These are understood to have been mainly in Belgium and the Netherlands.
In an echo of Balfour Beatty’s position, the results statement said: “In the area of projects in control, BAM is making good progress in sharpening its processes for project tendering and execution.
“All tenders are now subject to the stage gate process, and with peer reviews for larger or more complex tenders. There is more focus on contractual awareness and cost forecasting as well as a mandatory evaluation of the financing of each potential tender.”
According to the document, Royal BAM Group managed to reduce absolute carbon emissions by 11% compared to 2013, from 272,000 tonnes to 242,000 tonnes. But when adjusted for increased turnover, the emission intensity in fact reduced by 15% compared to 2013.
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