Budimex.pl
EN    

Financial results of Budimex Group after three quarters of 2020

News date: October 28, 2020
Financial results of Budimex Group after three quarters of 2020

After three quarters of 2020, Budimex has achieved higher sales and better profitability. A stable order book allows for a fully efficient use of resources. The concluded road and railway contracts will make it possible to maintain a stable order book in the engineering area for at least over ten months.

 

Market situation:

  • Construction and assembly production rose by 1% after three quarters of 2020 and reached the level of PLN 73.7 billion.
  • We have observed a significant decrease in the number of orders from private investors and local governments, which makes construction companies reduce asking prices at the expense of the profitability of contracts.
  • The coronavirus pandemic had a limited impact on the results of Budimex Group. Despite obstacles resulting from the state of epidemic, Budimex Group has maintained business continuity in all operating segments.

Grupa Budimex (mln zł.)

Budimex Group (PLN million)

Sprzedaż

Sales

Marża brutto

Gross margin

% sprzedaży

% of sales

Zysk operacyjny

Operating profit

Zysk brutto

Gross profit

Zysk netto*

Net profit*

*przypisany akcjonariuszom jednostki dominującej

*attributed to the shareholders of the parent company

Rachunek zysków i strat

Profit and loss account

1-3 kw. 2020

1st-3rd quarter 2020

r/r

YoY

1,8% pp.

1.8% pp.


Results of Budimex Group:

  • In the three quarters of 2020, sales reached the level of PLN 6.17 billion and were 15% higher than last year, with increases in each segment.
  • The gross profit margin of Budimex Group was 5.7% as compared to 4.0% in the three quarters of 2019.
  • The gross profit margin of the construction segment was 3.5% as compared to 2.7% in the corresponding period of 2019. Restrictions related to the introduction of the state of epidemic did not significantly disturb the Group’s activities in this area.
  • When it comes to the real estate segment, in the last two months we have recorded a significant increase in the number of concluded notarised contracts, resulting from the schedules for the execution of individual residential projects. After a slow-down in the second quarter of 2020, we have observed a restoration and stabilisation of monthly pre-sales volumes.

Pozycja gotówkowa netto (mln złotych)

Net cash position (PLN million)

Segment budowlany

Construction segment

Sprzedaż

Sales

Zysk operacyjny

Operating profit

% sprzedaży

% of sales

Zysk brutto

Gross profit

Rachunek zysków i strat

Profit and loss account

1-3 kw. 2020

1st-3rd quarter 2020

r/r

YoY

0,8% pp.

0.8% pp.


Cash position of Budimex Group:

  • At the end of September, the net cash position of Budimex Group was PLN 2,145 million.
  • In the first three quarters of 2020, the net cash balance improved by PLN 790 million.
  • The cash position was supported mostly by quick invoicing of current works and a quick settlement of liabilities by investors, as well as positive operational cash flows at initial stages of new infrastructure contracts.

 

Results of the construction segment of Budimex Group:

  • Sales in the construction segment increased by 7%, achieving slightly higher growth than the rest of the market. The gross profit margin of the construction segment was 3.5%, as compared with 2.7% in the corresponding period of 2019. In the last quarters, we have observed a stabilisation of the order book in all operating segments, with the exception of a few projects. Since the beginning of the year, we have signed contracts worth PLN 7.0 billion, thanks to which the order book at the end of September increased to PLN 12.9 billion.
  • Contracts acquired in the infrastructural area are mostly (PLN 3.1 billion) design-build projects, which makes it possible to adequately plan works and effectively use production capacity in the next 2-3 years.
  • At present, the execution of construction contracts is proceeding smoothly and cooperation with contracting entities is very good.

Segment deweloperski

Real estate segment

Sprzedaż

Sales

Marża brutto

Gross margin

% sprzedaży

% of sales

Zysk operacyjny

Operating profit

Zysk brutto

Gross profit

Przedsprzedaż

Pre-sales

Przekazania notarialne

Notarial transfers

Rachunek zysków i strat

Profit and loss account

1-3 kw. 2020

1st-3rd quarter 2020

r/r

YoY

3,7% pp.

3.7% pp.

 

Results of the real estate segment of Budimex Group:

  • In the three quarters of 2020, the clients of Budimex Nieruchomości signed 1087 notarial deeds, including 465 contracts in the 3rd quarter of 2020.
  • The revenue of the real estate segment was PLN 553 million and was 31% higher as compared to 2019, whereas the gross profit was PLN 121 million (an increase of 65%).
  • The pre-sale in the three quarters of 2020 amounted to 1199 apartments. After a period of slowdown in March and April, in the last few months we have observed that the interest in apartments has been gradually growing.
  • Budimex Nieruchomości now offers more than 1500 apartments in 5 locations.

 

Segment usługowy

Service segment

Sprzedaż

Sales

Zysk operacyjny

Operating profit

% sprzedaży

% of sales

Zysk brutto

Gross profit

ane pro forma, sporządzone przy założeniu konsolidacji Grupy FBSerwis od dnia 01.01.2019

Pro forma data, drawn up with the assumption that FBSerwis Group has been consolidated since 1 January 2019

Rachunek zysków i strat

Profit and loss account

1-3 kw. 2020

1st-3rd quarter 2020

r/r

YoY

0,5% pp.

0.5% pp.

 

Results of the service segment of Budimex Group:

  • Sales in the service segment amounted to PLN 431 million and were 20% higher* than in the corresponding period of the previous year.
  • The gross profit in this segment was PLN 51 million and the profit margin reached 11.7%

 

Budimex forecast for the next quarters:

  • A stable order book allows for a fully efficient use of resources. The concluded road and railway contracts will make it possible to maintain a stable order book in the engineering area for at least over ten months.
  • The challenge in the coming quarters will be to secure contracts for residential/commercial/industrial buildings, where a reduction in new private investments and a partial suspension of planned public investments are evident.
  • In the last months, we have observed that our competitors take more aggressive actions. The cheapest offers are often up to 20-30% lower than our accurately calculated cost estimates and are significantly lower than the budget for investments.
  • We estimate that the impact of the coronavirus pandemic on the results of Budimex Group has slightly exceeded PLN 30 million. It concerns mostly additional costs related to delays in the execution of several construction projects. For a few weeks, we have observed an increase in the number of coronavirus cases among the employees of our Group, which destabilises our work and leads to delays in the performance of contracts. We expect the number of cases to keep growing.
  • Nevertheless, we hope that business will stabilise in the next quarters, which allows us to be optimistic about the future profitability of the construction segment, given the current structure and quality of the order book.
  • We have decided to review the strategic options of the real estate segment. We are considering several scenarios, but the current first-choice option is assessing the market interest in a disposal of the shares of Budimex Nieruchomości. The first results of market analyses are expected at the end of November or the beginning of December 2020.
  • We want to keep developing our activity in the service segment, especially with regard to waste disposal and management. We are analysing several medium-sized acquisition projects, but we do not rule out larger investments.
  • Budimex remains the biggest CIT taxpayer among construction companies in Poland. According to a ranking prepared by the Ministry of Finance, since 2017 Budimex has moved from the 61st to the 25th place in the list of the largest individual CIT payers in Poland.

I understand

This site uses cookies, so that might work better. Read about cookies at Website Privacy Policy