Boom: for later

The results of Polish construction companies listed on the WSE and the sector's prospects as a whole, do not give cause for optimism

Last year Budimex, the largest construction company listed on the WSE, made a net profit of PLN -38.612 mln with sales of PLN 2.4 bln. These results converged with analysts' expectations.
Given that the expected increase in dynamic investment in the Polish economy has not yet arrived and the prices of construction are coming down, it is difficult to count on any improvement in results. "I wouldn't expect any investment boom in the near future," says Majewski, though he doesn't find the situation in construction catastrophic, as February's results have shown.
However, there are some construction companies listed on the WSE, which are doing comparatively well in the circumstances. "Polnord is coping excellently and its portfolio for 2003 is probably almost full," Majewski says. The company was recently contracted to build an Auchan retail centre in Wrocław at a contract value of PLN 81.8 mln which was nearly 40% of its portfolio in 2002 and a Leroy-Merlin hardware store at a cost of PLN 15.3 mln.
Investors also hope that Polish companies will win some of the contracts for reconstruction after the Iraq war. "These expectations have resulted in a mini bull market, however the chances are relatively scant so the increase is based purely on speculation," added Majewski. So far only Budimex and Mostostal are the beneficiaries of these presumptions.

Contributed by:
Mirosław Kuk