Comments for the 1st quarter 2013

News date: April 25, 2013
Comments for the 1st quarter 2013

The decrease in sales in the construction segment has structured its results. In the first quarter 2013 in this segment the operating profit and profit before tax was of EUR 14 million zł and a net profit of 10 million zł, compared to profit at the level of 31 mln zł, 38 million and 29 million zł zł in the same period of 2012.
Budimex managed to improve profitability in this segment at the level of gross margin from 6.9%
in the first quarter of 2012 to 7.3% in the first quarter of this year.
Due to lower sales the profitability at the operating profit amounted to 2.0% compared to the profitability of 2.9% achieved in the same period in 2012, which is a derivative of a much lower sales than in the comparable period last year.
In the first quarter of this year Budimex Group has signed contracts worth nearly 0.5 billion zł (480 million zł). This value is comparable to the same period last year (499 million zł).
As a result, the Group's order portfolio at the end of March amounted to 4.8 billion zł, compared to 4.9 billion zł at the end of 2012. At the same time we look forward to signing further contracts worth 1.4 billion zł (on the basis of tenders, where Budimex Group companies' offers have obtained the first place).
The Budimex Group's net cash position, including their own cash and short-term securities, net of external sources of funding is maintained at a level similar to the same period of 2012. At the end of March 2013 amounted to 718 million zł, while at the end of the first quarter of 2012 was 752 million zł.
The first quarter of each year in the construction segment is the quarter when we observe a decrease of cash compared to the end of the year. It is a cyclical phenomenon resulting from cash management
in this segment. The decrease in net cash in the first quarter of 2013 was 40% and was lower than the decline recorded in the corresponding period of the previous year of 52%.
At the level of the gross and net profits in the first quarter positively impacted the results of the development segment, which recorded 15 million zł gross profit and 12 million zł net profit, compared to 4 million zł gross profit and 3 million zł net profit earned in the 1st quarter of 2012. Higher earnings development segment were the result of an almost threefold increase in the sale of Real Estate Budimex compared with the same period of 2012.
During the quarter, Budimex Real Estate has sold 204 flats, while in the same period of 2012 years of 75 units. Sales made by the Company depends on the deadlines for the completion of construction projects and the transfer of completed units to customers and is not a seasonal phenomenon, hence the comparison with the corresponding quarters of sales each year is not justified.
At the same time in the first quarter of this year Budimex Nieruchomości pre-sold 121 homes (excluding booking), while in the same period last year, 98 units.
Positive impact on sales of the Budimex Group was also in other operations segment. In the first quarter of this year sales revenues in this segment amounted to 97 million zł, while in the first quarter of last year it was 59 million zł. The increase in the sales is primarily the result of the dynamic development of Budimex Danwood, a 100% subsidiary of Budimex SA, which is engaged in manufacturing and assembly of houses in wood frame construction.