The postponement of the Jakarta project has a negative impact on the company's short term financial performance. The third quarter result reflects this. Hence, the operating profit (EBIT) in the quarter was negative with -23 MNOK, on level with the previous quarter, but lower than same quarter last year.
However, the top line figures were picking up during the quarter. Revenues came in at 154 MNOK compared to 144 MNOK Q3 last year and also substantially higher than the previous quarters in 2012.
Order intake totalized to 153 MNOK, clearly improved compared to previous quarter which summarized to 68 MNOK. The main orders this quarter were 52 MNOK variation orders related to the congestion charging infrastructure project in Sweden, 33 MNOK infrastructure contracts in Australia, including one year service and maintenance, 24 MNOK call off on tag frame agreement in Brazil worth 72 MNOK and 10 MNOK tag order in Portugal. Consequently, the Group's order backlog increased to 552 MNOK at the end of the third quarter 2012 compared to 549 MNOK at the end of the second quarter 2012, and 75 MNOK higher than previous year.
For obvious reasons the postponement of the Jakarta-project has a lot of attention, and CEO Øyvind Isaksen is firm in his comments: "The conclusion of the Jakarta-project is still pending final decision on financing. Our client is in the process of concluding and it is our belief that this project will materialise, and as such represent a start of a new era for the company - a company changer."
However, Isaksen also reminds of a bigger picture on the back of all the attention on the Jakarta-project: "We have to keep in mind that Road User Charging still is a market in its early days, and by nature such early markets are project driven. We are working hard to develop Q-Free
further as a long term leading player, and will going forward consciously focus on making the financial performance less dependent on single project events. The forming of the new Advanced Transportation Management Systems (ATMS)-division is an example of such an initiative,
and we have seen several potential projects within this area in the last quarters."
The CEO is not pleased with another quarter with red figures, but sees bright spots: "The order intake in the third quarter is acceptable and the signature project in Gothenburg is developing well also with additional variation orders in the quarter." He confirms the company's positive market view: "We have previously identified and communicated an accessible global opportunity pipeline within our present core business in the range of NOK 5 - 15 billion for the next few years. Although Europe is hampered by the weak economic development in the region, it seems like this is of less importance in our market compared to other sectors. We have not seen any reason to revise the pipeline numbers and planning activities continue to be high."
Following the postponement of the Jakarta-project, Q-Free confirms a modest expectation for the year 2012 in the Q3-report. The year in total is expected to post lower revenues than last year, with an expected full year EBIT 2012 in line with the accumulated figures per Q3-12.