Comments from Dariusz Blocher, President of the Management Board of Budimex SA, on selected financial data from the consolidated Financial Statements of the Budimex Group for the 3rd quarter 2013

The improving situation on the market results in decreasing the sales decline for the first and second quarter of this year of the Budimex Group, which in the third quarter amounted to 19% with sales of 1 368 million zł.
In the January - September 2013 period, the Group reported improved profitability at every level of a profit. During this period, the operating profit amounted to almost 144 million zł with the yield of 4.2%, gross profit of 142 million zł with yields of 4.1% and net profit of 112 million zł with yields of 3.2%.
In the same period of 2012, the Group generated 109 million zł with yields of 2.4%, 134 million zł to the profitability of 2.9% and 77 million zł with yields of 1.7%.
In the third quarter of this year. the Group's profitability improved at both the gross margin on sales (from 4.0% to 7.6%) and at the operational level (from 3.1% to 4.0%), mainly due to improved profitability in the construction segment. The Group generated during the quarter PLN 55 million operating profit compared to 53 million zł earned in the same quarter of 2012. The profitability of the Group's net level was maintained at a comparable level.
The Group's net cash position, including their own cash and short-term securities, less the external sources of funding at the end of September 2013 totaled 920 million zł, while at the end of the third quarter of 2012, 718 million zł. The increase in the level of cash resulted primarily from principal business, but also, to a significant extent, property development segment, due to an increase in the volume of pre-sales.
In the third quarter of this year the Budimex Group has signed contracts worth 483 million zł, while
in the corresponding quarter of 2012, with a value of 1 041 million zł. From the beginning of the year, the Group reported signed contracts worth 636 million zł 2 compared to 1 962 million zł in the same period of the previous year (an increase of 34% yoy). The third quarter was a period of preparation for the tendering of the new EU perspective, as evidenced by the participation of the Group companies Budimex in numerous proceedings prequalification. This allows for optimism about the market value of new contracts next year.
Order backlog at the end of September stabilized at 4.8 billion zł. At the end of 2012, the value of the portfolio was similar and amounted to 4.9 billion zł. In the near future we expect to sign new contracts with a value of approx. 250 million zł (on the basis of tenders, where Budimex Group companies' offers have obtained the first place).

Despite the difficult situation in the construction business segment improved profitability at the gross margin on sales and operating. In the third quarter, the main activity resulted in gross profit of 85 million zł, compared to 53 million zł developed in the third quarter of last year. At the same time, this segment generated an operating profit level as in the third quarter of 2012 41 million zł, improving profitability from 2.6% to 3.3%.
The third quarter was a success also in the development sector. Budimex Nieruchomości pre-sold (without reservation) 214 units, an increase of 91% yoy and may be a sign of the improving health of the housing market. In the first three quarters of this year Budimex Nieruchomości pre-sold a total of 494 apartments.
After three quarters of this year development segment recorded a 30% increase in sales
compared with the same period of 2012 (167 million zł, respectively, compared to
Zł 125 million) on the notarized sale at the level of 344 apartments.
Segment operating profitability has improved both in the quarter and in total for the period January - September 2013 compared to the corresponding periods of the previous year and amounted to 12.0% and 12.5%.
In the coming months it is planned to introduce the sale of a number of new projects, which will extend the current offer of hundreds of apartments in different locations.
The current situation of the Group is stable as evidenced by the profits earned so far in 2013, and a very good cash position.
Next year should be comparable to the current in relation to the value of the construction market, however, we wouldn't be surprised further, single-digit decline in the value of construction and assembly. Budimex Group, whereas the prospect of recovery in the market for infrastructure contracts, it will be a stabilization of revenue and costs control while building a portfolio for the coming years.