Budimex.pl

Comments for the 1st quarter 2012

News date: April 25, 2012
Comments for the 1st quarter 2012

The Budimex Group owes this growth to the construction segment, particularly to the implementation of major road contracts. Sales in this segment increased in the comparable periods of up to over 56%.
In the first quarter of this year. The Group generated a profit at the operating level of over 37 million zł, while in the same period of 2011, nearly 58 million zł. The decline in profitability due to a much smaller share in the revenues and profits of the Group's property development business, which is characterized by higher profitability of profitability in the construction segment, as well as a significant increase in the cost of implementation of road contracts.
In the first quarter of 2012, Budimex Nieruchomości reported 75% drop in sales compared with the same period of 2011. At the end of March company pre-sold 98 apartments (without reservation), while in the same period last year, 229 units.
Lower levels of sales and pre-sales resulting from running out of ready-to-move-in flats and the fact of starting new projects, which flats are going into to the company's offer.
At the end of the first quarter the company implemented 6 development projects with a total of 789 available units.
In accordance with the applicable accounting principles of the company presale apartments will be reflected in the financial results of Budimex Property after completion of the sales and signing the notarial acts in future periods.
The decline in the profitability of construction activity in the first quarter of this year compared to the level achieved in the same period last year is a result of an increase in the cost of construction materials by 40%, the scale was not possible to predict at the time of signing contracts.
In the first quarter of this year we signed contracts worth 500 million zł, while in the same period of 2011, with a value of 800 million zł. Order portfolio at the end of March amounted to 8.1 billion zł. Today, however, we are waiting to sign new contracts with a value of over 220 million zł (on the basis of tenders, in which Budimex Group companies have obtained the first place).
The cash position of the Group at the end of the first quarter including their own cash and short-term securities, net of external funding sources amounted to 750 million zł and was lower than in the same period last year.
In the next 2-3 years, we expect a much smaller number of contracts in the public sector and a significant increase in the cost of contracts for declining market.