The Danish civil engineering giant MT Højgaard has lost one of its most lucrative contracts – the operation and maintenance of the American air base in Thule, in northwestern Greenland – to an American company. The Danes have benefited from the arrangement since 1971.
Børsen reports that a review of MT Højgaard subsidiary Greenland Contractors’ accounts revealed that the deal brought in 590 million kroner between 2009 and 2013 – 120 million kroner a year for the bottom line.
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Sky-high margin
The contract yields a profit margin of 30 percent, which is astronomical compared to current industry averages.
Torben Biilman, the head of MT Højgaard, explained to Børsen that the loss wouldn’t go unnoticed. “It’s obvious when you pull some turnover and profit out, you need to find it elsewhere,” he said.
“That’s what we’re doing. But we’re sad that we’ve not been renewed. We’ve been happy with it – that’s no secret”
Biilman told Børsen that the company was aiming for a 5 percent profit margin before tax in 2015. Despite the loss of the Thule contract, he said he was confident that this could be achieved. “The cases we have now are reasonable and will take us to that goal we’re aiming for,” he said.
“That’s with or without a new agreement up there.”
One of MT Højgaard’s other subsidiaries, Enemærke & Petersen, has been implicated in the construction cartel scandal that has recently resulted in record fines for price-fixing.
