Results of the Budimex Group after the first half of 2020

News date: July 29, 2020
Results of the Budimex Group after the first half of 2020

Market situation:

Construction and assembly production increased in the first half of 2020 by 5%, reaching the level of PLN 45.4 billion

The coronavirus pandemic had an impact on the results of the Budimex Group in the first half of 2020, especially in the construction segment

Despite the restrictions resulting from the state of epidemic, the Budimex Group maintained continuity of work in all operating segments


Results of the Budimex Group:

  • Sales in the first half of 2020 reached PLN 3.73 billion and was higher than in the first half of 2019, thanks to, among others, consolidation of the results of the FBSerwis Group and higher sales in the construction segment
  • The gross profit margin of the Budimex Group was 4.1% compared to 3.3% in the first half of 2019
  • The gross profit margin in the construction segment in the second quarter of 2020 was similar to that of the first quarter of 2020. Restrictions related to the introduction of the state of epidemic did not significantly disturb the Group’s activities in this area
  • In the real estate segment, over the last two months we have recorded a significant increase in the number of concluded notarial contracts, resulting from the schedules for the execution of individual residential projects, but also from the shift of contracts planned for March and April. After a period of slowdown, the recovery of demand and an increase in monthly pre-sales are visible


Cash position of the Budimex Group:

  • At the end of June, the Budimex Group’s net cash position was PLN 1,903 million
  • During the first six months of the year, the net cash balance improved by PLN 548 million
  • The cash position was supported primarily by efficient invoicing of current works and quick payment of receivables by investors


Results of the Budimex Group’s construction segment:

  • The sales of the construction segment increased by 8%, achieving growth slightly higher than the market
  • The gross profit margin of the construction segment was 2.2%, compared with 1.7% in the first half of 2019
  • Since the beginning of the year, we have signed contracts worth PLN 3.8 billion, thanks to which the order book at the end of June increased to PLN 11.6 billion
  • On 7 July, we signed a key contract for the Budimex Group to rebuild the Warszawa Zachodnia station, worth PLN 1.8 billion. In addition, contracts worth over PLN 1.5 billion are waiting for realisation
  • At present, the execution of construction contracts is proceeding smoothly and cooperation with contracting entities is at a very good level


Results of the Budimex Group’s real estate segment:

  • Customers of Budimex Nieruchomości in the first half of 2020 signed 622 notarial deeds, 618 of which were signed in the second quarter of 2020
  • Revenue from the real estate segment amounted to PLN 275 million and gross profit reached PLN 61 million
  • Pre-sale of apartments in the first half of 2020 was 816. After a period of slowdown in March and April, for the last two months we have been observing a gradual increase in interest in apartments, which translates into an increase in pre-sales
  • The current offer of Budimex Nieruchomości comprises almost 1,500 apartments in 5 locations


Results of the Budimex Group’s service segment:

  • Sales of the service segment amounted to PLN 277 million (of which PLN 276 million are attributable to the FBSerwis Group, whose results have been consolidated using the full method from the second half of 2019)
  • The segment's gross profit was PLN 31 million and profit margin reached 11.3%


The next few quarters under the Budimex Group’s eye...

  • A stable order book allows for fully efficient use of resources. Signing a contract for the reconstruction of Warszawa Zachodnia station and projects waiting for realisation will allow to maintain an appropriate order book in the engineering area in the perspective of at least several months.
  • The challenge in the coming quarters will be to win contracts for residential/commercial/industrial buildings, where a reduction in new private investments and a partial suspension of planned public investments are evident
  • The risk related to the spread of coronavirus has been reflected in the change in work organisation principles in companies belonging to the Budimex Group by, among others, introducing the possibility of remote work, securing hand sanitizers for employees or reorganising the space to ensure working conditions in accordance with the recommendations of the Chief Sanitary Inspectorate
  • We estimate that the impact of the coronavirus pandemic on the Budimex Group’s results in the first half of the year is approx. PLN 36 million and mainly concerns additional costs related to an increase in the duration of several projects and the costs of adapting work space and purchasing personal protective equipment
  • We positively assess the quality of customer relations in the current reality. Cooperation with public procurers, especially GDDKiA and PKP PLK, as well as the Ministry of Infrastructure, is very good and communication is fast and effective
  • We have decided to review the strategic options of the real estate segment. We are considering a number of scenarios, including gaining a significant investor, entering into a strategic alliance, listing the company on the WSE. We do not exclude other options that may arise as a result of the review, not excluding the sale of assets
  • We are undertaking aid measures for hospitals fighting against COVID-19. The Budimex Group provides financial and material support to several hospitals in the areas of Poland where the scale of needs is greatest. The total support of the Budimex Group in the fight against COVID-19 has reached about PLN 2.6 million
  • The Budimex Group consistently engages in long-term social programmes and, despite the demanding market environment, meets deadlines and commitments, while ensuring the comfort of work and staff development. Recently, we have received the prestigious CSR Golden Leaf. At the same time, our efforts in the area of human resources have resulted in the 4th place in the Universum Most Attractive Employers Poland ranking (in the engineering category).