Budimex.pl

Commentary on selected financial data for the first half of 2011

News date: August 3, 2011
Commentary on selected financial data for the first half of 2011

This increase results from a significant increase (by nearly 52%) in sales in the construction segment of the Budimex Group, which offset the decline in sales (by 45%) in the real estate development segment resulting for the sales of the stock of finished flats held by Budimex Nieruchomości already in the previous year. The Company recognises sales revenue only upon signing the notarial deed of sale. In the second quarter of the current year, Budimex earned consolidated net profit at the same level as in the corresponding period of 2010, despite significantly lower profit generated by the real estate development segment in this period.Therefore, the fact that the consolidated net profit earned in the first half of 2011 is lower than in the first half of 2010 results from the Group’s performance in the first quarter of 2011. The operating margin on construction activities increased from 5.5% in the first quarter of 2011 to 5.8% in the second quarter of 2011. In turn, the real estate development segment, due to the continuation of the policy of selling the stock of finished flats, recorded a decrease in operating profitability from 13.8% in the first quarter to 11.2% in the second quarter of 2011. In the first half of 2011, Budimex Nieruchomości pre-sold 405 flats (excluding reservations), which ranks the company as one of the largest housing real estate development companies in Poland. At present, Budimex Nieruchomości is implementing 6 projects in Warsaw, Kraków and Poznań, with the total number of flats amounting to 1140. The sales of these flats will be reflected in financial results of subsequent years. In the first half of the current year, the total value of construction contracts signed by Budimex amounted to more than PLN 2.9 billion which, taking into account a significant decrease in the number and value of infrastructural contracts announced in that period, as compared to the previous year, must be recognised as a major achievement. As at 30 June 2011, the net cash position of the Budimex Group amounted to PLN 644.8 million, as compared to PLN 504.5 million in the same period of the previous year. In the construction segment, the Budimex Group’s net cash position declined as compared to 30 June 2010, while the real estate development segment recorded an increase in the net cash position. As at the end of June 2011, the Budimex Group’s order book amounted to more than PLN 7.9 billion.