NYAB, we continue to grow.
We are approaching the end of the year and can state that we are growing, the consolidation that was carried out in 2016 has given us the conditions to handle the current volume of just under SEK 500 million for 2017 in a good way.
We see that we have a clearly worse result in 2017 than we had the previous year. In 2016, the NYAB Group had an operating profit just above 10%, now we look to be able to handle just over 8%. We can describe this as more than approved, taking into account the strong growth. And the result is thus still well above the industry average.
We end the year with a well-stocked order backlog, and we already know that we will have strong growth also in 2018. Several of our ongoing projects exceed SEK 100 million and are multi-year.
We have put the Business Area building on the track and the business area delivers better than the high expectations I have for them. The newly formed subsidiary NYAB Infrastruktur has more than shown what they stand for and production is already in full swing. All four business areas deliver results.
It becomes very clear how important it is that the "old" and the "new" coexist and learn from each other. This applies to new recruitments as well as between business areas. So far, I think we have succeeded well with this, NYAB as a whole is better. Even clearly better. We can offer a complete end product to more customers. We have fantastic synergies between the business areas and we work as a team. ETT NYAB. And that is one of the single most important factors for us to continue to be successful. We also live and operate in a part of the country with strong seasonal variations, so the benefit of having a developed and less seasonally sensitive construction business should not be underestimated. The fact that overhead costs are reflected in larger volumes and more business areas also strengthens NYAB's entire competitiveness.
During the year, NYAB completed projects from Dalarna and Gävle to Kiruna. Our largest market is Norrbotten and more specifically the ore fields and the square. This year, we have passed one hundred completed and completed projects since 2013. Our customer base is diversified in terms of both segments and customers. We see that we carry out projects together and have framework agreements with most state-owned companies and plants. Vattenfall, Lkab, Swedish Radio, the Swedish Transport Administration, the Swedish Fortifications Agency, the Swedish Maritime Administration and others.
The market outlook looks good in the coming years, the ore fields have large volumes of construction in front of them and the supply in the square will also be at high levels. Kaunis Iron is working for a restart in Pajala, where the biggest obstacle right now seems to be the authorities' permission. At the same time, there is some concern about the world market price of iron ore, China's steel production is forecast to decrease while Vale's huge mine S11D is approaching opening, although initiated sources say that it will take another up to 1 year before opening. As this has an impact on Lkab, the region's largest employer and company, there is reason to pay attention to this. The housing market, and especially when condominiums undergo a settlement, before the extent is known and the bottom is reached, there is another risk. Nationally, the supply of construction is far above average. Despite this, we see that many industry players have weak or no profitability. Competition remains fierce, foreign players and privately owned companies are gaining market share. It is important for all players to adapt to prevailing market conditions.
We see that NYAB is strong and that we can to a large extent choose our customers. During this winter, we will decide who we want to have a long-term collaboration with, who wants to work with us and then try to develop with them. This will be a strategy work that is crucial for how NYAB develops in the coming years. As the situation is now, we have to say no to many who want to procure us directly, who want us to submit tenders or who want to negotiate a contract directly. NYAB works with interest, commitment, knowledge and drive, in addition we take responsibility. We want something and it pays off. Our best way to contribute to the region's development is to offer high-quality buildings and projects with a competent, cost-effective and cost-conscious organization. And many of our customers see, understand and appreciate it.
During the past year, NYAB's owners have received interesting and a couple of less interesting requests to sell the company. The acquisition plans have been presented by both financial and industrial players. It has made us reflect, and decide that we do not want to sell NYAB. When we discussed and analyzed, we came to the conclusion that an attractive idea would be to list NYAB on the stock exchange, the idea of listing a Norrbotten company with headquarters in Luleå is attractive. It is of course a long time until we are there, but if we keep the same pace of development as we have done since 2013 for the next 4-5 years, the question will begin to be relevant. It should be emphasized that this is not an objective. It should also be pointed out that this can be done in many different ways, for example by merging with another or other companies before listing.
The most important thing, however, is that we continue with what we do well, that we keep the joy, drive, curiosity and forward thinking.
Whichever paths we choose, this will go well and the future is exciting.
- Johan Larsson, CEO NYAB