Budimex.pl

Information on the financial data of the Budimex Group in the first quarter of 2019

News date: April 26, 2019
Information on the financial data of the Budimex Group in the first quarter of 2019

Market situation:

 

  • Construction and assembly production rose by 13% in the first quarter of 2019 and reached the level of PLN 18 billion.
  • The industry's efforts to introduce indexation of contracts did not solve the problems related to ongoing contracts – there is no root-cause solution to the issue of unprofitable contracts signed 2-3 years ago.
  • Relevant statistics show that the sector ended the last year with a profit, but most likely it resulted from the high profitability of smaller entities.
  • Market difficulties mainly affect large companies (with more than 250 employees) that carry out the largest orders, with contract completion periods of even 3-4 years, and largely rely on subcontracting services.

 

Results of the Budimex Group:

 

  • The sales of the Group in the first quarter of 2019 rose by 3% and reached the level of PLN 1.4 billion.
  • Gross profit margin for the Budimex Group amounted to 3.3%, as compared to 6.0% in the first quarter of 2018.
  • The cost pressure in the construction industry had a negative impact on the results of the construction segment, where the gross profit margin fell to 1.3% (as compared to 4.4% in the first quarter of 2018).
  • The property development segment achieved the gross profit margin at the level of 14.8%, thus improving the result from the first quarter of 2018 when the gross profit margin was 13.1%.

 

  • Cash position of the Budimex Group:

 

  • In the first quarter of 2019, we recorded a seasonal drop in the net cash balance to the level of PLN 627 million.
  • We continue the policy of financing subcontractors through earlier payments and frequent invoicing of works.
  • The cash position prompted the Management Board of the Company to recommend a dividend payment of PLN 6.3 per share for the shareholders, that is approximately 50% of the profit for 2018.


Results of the construction segment of the Budimex Group:

 

  • Sales in the construction segment increased by 10%, reaching a growth rate slightly lower than that of the industry.
  • The order portfolio of the Budimex Group remains at a safe level of over PLN 10 billion.
  • Further cost-push inflation in the industry led to a gross profit margin drop in the construction segment to the level of 1.3%.
  • Pursuing our development strategy for the railway market, in March we signed another important contract for the completion of works on the railway line No. 7 – its value is PLN 0.6 billion. We are also preparing to sign a contract worth PLN 1.5 billion for the modernisation of the Gdynia Port railway station.
  • Offers submitted by contractors are more cautious and start to reflect the new cost environment, as a result of which investor budgets are regularly exceeded.
  • Results of the property development segment of the Budimex Group:
  • In the first quarter of 2019, the customers of Budimex Nieruchomości signed 601 notarial deeds,
  • Advance sales in the property development segment reached the level of 265 apartments and were close to the sales level in the first quarter of 2018.
  • Revenues in the property development segment decreased by 11% and amounted to PLN 187 million. Gross profit was PLN 28 million with high profitability of 14.8%
  • Budimex Nieruchomości now offers almost 1,000 apartments in 4 locations.

 

Please click the link below for the report: https://www.budimex.pl/repository/relation/raporty/2019/2019_SA_Qr_I_Budimex_SA.pdf

 

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BUDIMEX SA is a company with a 50-year tradition that considerably contributes to the development of the Polish economy. Our work improves the quality of life of millions of Poles. During the 50 years of the company's operations, we have completed thousands of modern infrastructure, building and industrial investment projects. We have become the leader of the Polish construction market thanks to our culture of innovation and improvement and compliance with the principles of sustainable development. We are present not only on the Polish market but also on the foreign markets. We are gradually increasing our involvement in the facility management sector and the waste management sector. Our company has been listed on the Warsaw Stock Exchange since 1995. Since 2011, we have been included in the RESPECT index of the most responsible listed companies. Our strategic investor is Ferrovial - a Spanish company with the global reach. The group consists of: Budimex Nieruchomości and Mostostal Kraków.

We are one of the signatories of the Agreement for Safety in Construction - an initiative undertaken in 2010 that brings together the largest general contractors in Poland in order to raise the level of work safety in the construction industry.


 
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