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SINTEF announces operating profit of NOK 106 million for 2014

SINTEF announces operating profit of NOK 106 million for 2014

Published 07 May 2015
Executive Vice President and Deputy CEO

SINTEF made an operating profit of NOK 106 million in 2014, and a pre-tax profit of NOK 143 million. A number of one-off items have had a positive effect on the financial result, but profit from ordinary operations has been inadequate.

Gross operating revenues were NOK 2936 million compared with NOK 2942 in the previous year. The operating profit was NOK 106 million compared with NOK 71 million in 2013. The pre-tax profit was NOK 143 million compared with NOK 103 million in 2013.

One-off impacts influenced financial result

A number of one-off items have affected the financial results and together have contributed towards improving earnings. Changes to pension plan arrangements contributed a one-off expenditure reduction without cash effect of approximately NOK 100 million, while the sale of the company eDrilling Systems provided NOK 12 million in operating revenues and NOK 9 million in financial revenues.

A provision of NOK 40 million was made for EU projects in connection with unresolved costs coverage issues linked to the EU's 7th Framework Programme. Furthermore, a provision of NOK 30 million was made for the closing down of SINTEF's research foundation in Brazil.

Pride in our employees' contribution

"I am proud of the work that SINTEF's employees have contributed and the scientific and technical results they have achieved", says CEO Unni Steinsmo. "However, we are not pleased with SINTEF's financial result for 2014. Underlying earnings from a number of the institutions are inadequate, and we will have to intensify our focus on effective operations. This is particularly important during a challenging time for Norwegian businesses", she says.

SINTEF's operating margin was 4.1 per cent. The objective is 5 per cent over time.

Major investments in laboratories and equipment

No owners receive dividend payments from SINTEF. The profits from our activities are invested in new research, scientific equipment, laboratories and the development of new knowledge.

A total of NOK 172 million was invested in laboratories, scientific equipment and other business assets. The largest single investment made in 2014 was NOK 80 million linked to SINTEF Energy Research's new high voltage laboratory at Blaklia in Trondheim. This laboratory has a total investment budget of NOK 160 million, and will be opened in September 2015.

Since 2007, SINTEF has invested approximately NOK 1 billion in laboratories, office facilities and equipment.

Lower revenues combined with major investment expenditures have resulted in negative cash flow figures for the last two years. This means that the SINTEF Foundation has to improve its liquidity in 2015.

 

Key financial figures for SINTEF 2010-2014 (Group)

NOK mill. 2010 2011 2012 2013 2014
           
Financial
result
         
Gross operating revenues 2813 2789 2966 2942 2936
Net operating revenues 2325 2333 2487 2517 2561
Operating profit 139 98 99 71 106
Pre-tax profit 170 142 132 103 143
Investments 83 88 154 135 172
Operating margin (%) 6.0 4.2 4.0 2.8 4.1

 

International sales

During 2014, SINTEF worked on a total of 5,266 projects for 3,580 small and large clients. Forty-nine per cent of gross operating revenues were generated from projects carried out for Norwegian businesses.

Seventeen per cent of SINTEF's operating revenues were generated from international projects with invoicing addresses outside Norway. In reality, more than 50 per cent of SINTEF's revenues are linked to projects open to international competition. International sales amounted to NOK 504 million, the same figure as in 2013. In 2014, SINTEF had clients in 63 countries worldwide.

EU projects made up about half of our international sales. SINTEF is by far the largest Norwegian participant in the EU's research programmes.

The EU's 7th Framework Programme for research and technological development was wound up in 2013, but research linked to some of the projects will continue until 2018. As part of the EU's 7th Framework Programme, SINTEF was granted participation in 254 projects, and the role of Project Coordinator in 55 of these. In total, assurances of EU funding amounting to EUR 149 million were granted as part of the EU's Framework Programme in the period 2007 to 2013. A great deal of uncertainty still remains regarding the approval of hourly rates linked to the EU's 7th Framework Programme.

In the 2015 Norwegian State Budget, a positive clarification was announced regarding the terms of reference for participation in the EU's new Framework Programme called Horizon 2020. SINTEF is investing a great deal of resources in its participation in Horizon 2020, and it has already been made clear that SINTEF will be assigned the role of Project Coordinator for many major projects with budgets totalling in the region of NOK 40-50 million.

Health, Safety and the Environment (HSE)

A total of zero incidents of occupational injuries and sickness resulting in sick leave represented a major milestone for SINTEF in 2014, and resulted in an "H1 factor" (total injuries/sickness resulting in sick leave per million hours worked) of zero, compared with 1.1 in 2013. Sickness absence was at 3.9 per cent, at the same levels as in 2012 and 2013. SINTEF experienced no accidents in 2014 that resulted in negative impacts on the external environment.

Employee numbers and recruitment

At the turn of the year SINTEF had 2,082 employees. Fifty-three per cent of our researchers have doctorate degrees, compared with 40 per cent in 2005. In the same period, the proportion of women researchers has increased from 22 to 27 per cent.

Twenty-one per cent (398) of SINTEF's employees come from as many as 73 countries outside Norway. Recruitment from abroad contributes towards securing highly qualified researchers in Norway. SINTEF's foreign employees provide a valuable source of scientific and cultural expertise.

Robust scientific and technical results

SINTEF produces consistently high levels of quality in its scientific and technical results, and receives much positive feedback from our business partners and clients.

An important milestone in 2014 was the establishment by the Research Council of Norway of 17 new Centres for Research-Based Innovation (SFI). The centres will promote long-term industry applied research projects for a budget of NOK 3 billion over the next eight years. SINTEF is participating in nine of the new centres.