This website uses cookies to improve your browsing experience and the continued use of the webpage indicates your consent to ÅF’s use of these cookies. Find out more about how ÅF uses cookies and how you can manage them here: Read more

Press release

Press release

Summary of Annual Report 1997

* Consolidated profit was SEK 8.49 (11.11) per share, according to forecast

* Turnover increased by 7% to SEK 1,169 million

* Net worth increased to SEK 82 (79) per share

* The Board proposes a dividend of SEK 8.00 (5.50) per share

* 1998 consolidated profit is expected to exceed that of 1997

The market for the ÅF-Group’s services was somewhat weaker during 1997, compared with the most recent years. Capacity utilisation in the Group remained at a satisfactory level despite the weaker market, amounting to 70% (70%). Consolidated profits were affected negatively mainly due to declining margins.

Consolidated operating profit after net financial items, together with interest in associated companies, amounted to SEK 67.8 (88.7) million. The profit margin amounted to 5.8% (8.0%). Consolidated profit was affected by performance bonuses to the Group’s employees amounting to SEK 6 (9) million. Earnings per share after 28% standard tax amounted to SEK 8.49 (11.11).

Profit after full tax amounted to SEK 45.2 (60.6) million, corresponding to SEK 7.87 (10.55) per share. A transfer of SEK 1.4 (5.5) million was made for deferred taxes. Consolidated turnover amounted to SEK 1,169 (1,088) million. The increase was related mainly to an increase in the number of employees. Net financial items were SEK 15.4 (4.4) million, of which capital gain on the sale of shares amounted to SEK 16.1 (5.1) million.

The parent company’s turnover amounted to SEK 75 (74) million and profit after net financial items was SEK 16.9 (6.8) million. This increase was related to the above-mentioned capital gains from the sale of shares.

The Group’s net worth, calculated as shareholders’ equity with the addition of 80% of the surplus value of property, amounted at year end to SEK 471 (452) million, or SEK 82 (79) per share.

Consulting businesses
The consolidated profit of the consulting businesses fell to SEK 56 (85) million. This decline was due mainly to tougher price competition in the market and thereby reduced margins. Orders on hand at year end amounted to SEK 344 (323) million, which is considered satisfactory.

Trends for the consulting businesses per business area are shown in the tables below.

The parent company is not included in the above table. ÅF-Data’s turnover amounted to SEK 18 (15) million and their profit was SEK 1.0 (0.5) million.
Business areas Electrical Engineering and Instrumentation, and Mechanical Engineering and Electronics, posted good profits during the year. The expanding activities of ÅF-Industriteknik in the field of electronics and systems development were strengthened by the acquisition of operations of the IT company PRIMO System.

The profits of the other business areas were not satisfactory. Operations in business area Energy, HVAC and Sanitation Engineering were affected mainly in the HVAC segment, due to low activity in the construction sector. In Process and Environment, capacity utilisation declined and there was a decrease in profit mainly due to a downturn in investments in the pulp and paper industry.

Competition in the area of Inspection and Testing, which was formerly a government monopoly, continued to be very tough with considerable pressure on prices. There are signs, however, that the market is slowly beginning to stabilise. Certain cost-reducing steps were taken within this business area after the summer. As a result, the profit trend improved somewhat during the second half, when losses amounted to SEK -7 (-12) million.

During the summer the ÅF-Group signed a letter of intent with the Swedish Society of Engineers (ISF) to acquire a 19% interest in the educational company SIFU. SIFU carries out education and training in mainly technical and environmental subject areas. The company has a turnover of SEK 70 million and has 60 employees. The purpose of the acquisition is for SIFU to form the basis of a sixth business area - Education - with strong links to the other fields of the consulting businesses. The agreement also includes an option for the ÅF-Group to become majority owner in 1999.

During the autumn an agreement was also signed for the acquisition of ISO Swedish Management Group as of 1 Jan. 1998. This management consulting firm has 20 employees and a turnover of SEK 40 million. On 1 Jan. 1998 it changed its name to ÅF-Swedish Management Group. Under the name of ÅF-International, co-operation was immediately begun with the ÅF-Group’s international aid-funded operations. With this acquisition, the Group has a total turnover of SEK 75 million in aid-financed projects. This volume is expected to grow considerably during the coming years.

Among the many significant projects begun in 1997, the ÅF-Group was appointed main consultant for Peterson Linerboard of Norway in the rebuilding of a paper machine. Another important project was the rebuilding of a paper machine for STORA Grycksbo to provide expanded capacity, quality and availability. The project included competence in process engineering, electrical engineering and instrumentation.

The ÅF-Group was also appointed main supplier of consulting services in electrical, control and monitoring technology for ABB Stal for the next four years. ÅF-Kontroll carried out a safety study for Saab Automobile in Trollhättan. Handelsbanken Liv appointed the ÅF-Group to develop and maintain their computer system for life insurance and pension plans. The Group’s financial and project accounting system, PX Control, continued to score success on the market. Several consulting firms became clients during the year, including BenimaFerator, Bjerkings Ingenjörs-byrå, FB Enginee-ring, Rejlers Ingenjörer and Pronyx.

ÅF-International, which was formed as the ÅF-Group’s combined resource for aid-financed projects, obtained its first assignment: a district heating study for Gatchina, outside St. Petersburg.

During the year priority was given to further training of the employees in technical, environmental and IT subject areas.

Real Estate and Finance Administration
The Group`s properties are 95% office premises, used mainly by the Group’s consulting businesses. At year end the vacancy ratio was 5% (7%).

The Group had 38,000 sq. m of real estate at year end. During the year the office building was acquired in Norrköping in which the ÅF-Group has its consulting operations, with 100 employees. The purchase price for 4,000 sq. m was SEK 16 million.

At year end 1996 properties were valued by VM Fastighetsekonomer at SEK 316 million. The properties were valued internally at SEK 349 million by year end 1997. Book value amounted to SEK 236 (209) million
At year end the Group’s liquid assets amounted to SEK 91 (122) million, of which SEK 55 million was in listed Swedish and foreign stocks. The surplus value of the stocks was SEK 7 (7) million at year end. The remainder of the liquid assets was in the form of interest-bearing investments in Sweden.

In 1997 the Board adopted a new dividend policy by which AB Ångpanneföreningen’s dividend in the long term shall correspond to 50% of the consolidated profit after tax. The Board also decided that the goal for the ÅF-Group’s reported equity ratio in the long term should be kept within the interval of 40-45%. The equity ratio was 50% at year end 1997.

The dividend for fiscal 1996 was SEK 5.50 per share. In consideration of the new dividend policy and the long-range goal for the Group’s equity ratio, the Board of AB Ångpanneföreningen proposes to the 1998 Annual General Meeting a dividend of SEK 8.00 for fiscal 1997.

Outlook for 1998
During 1997 the market for the ÅF-Group’s services declined somewhat. Despite this decline market conditions were quite favourable on the whole. Market conditions in 1998 are expected to be the same as in 1997. It is expected that the ÅF-Group’s profit in 1998 will exceed that of 1997.

Stockholm, 17 February 1998
The Board of Directors
AB Ångpanneföreningen (publ)

For more information:Gunnar Grönkvist, CEO, or Kaj Sandart, Director, Corporate Information.
Tel.+46 8 657 10 00.

The full pressrelease incuding tables and figures is ready for download on