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Budimex still on top

Eurobuild CEE 15 March 2018
Budimex still on top
Dariusz Blocher, the CEO of Budimex Group
POLAND “2017 was another very good year for the Budimex Group: we have signed new contracts worth PLN 7.3 bln and we are entering year 2018 with a portfolio of orders exceeding PLN 10 bln,” commented Dariusz Blocher, the CEO of Budimex, on the construction group’s 2017 results.
Construction and assembly production increased by 12.9 pct in 2017, thus recording the highest increase since 2011. At the same time, the group increased its sales by 14.3 pct compared to the previous year and generated a net profit of PLN 464 mln. The increase in sales in the construction segment was in line with the market growth rate and amounted to 12.6 pct, while the increasing in deliveries in the development segment resulted in an increase in sales by 42.6 pct. A significant increase in the scale of projects in the construction sector caused a further increase in the price of raw materials and services of subcontractors. Furthermore, the industry is increasingly being affected by a decrease in the availability of labour.

“Despite unfavourable conditions, Budimex Group achieved satisfactory profitability of 9.2 pct at the operational level,” added Dariusz Blocher.

After a difficult 2016, the largest infrastructure investors significantly increased the number of tenders being awarded in recent months. The value of bids submitted by Budimex in 2017 increased by over 80 pct compared to the previous year. The tendering was driven by the road segment, primarily the General Directorate of National Roads and Motorways [GDDKiA]. The value of submitted bids for road construction in 2017 increased three times in relation to 2016, reaching PLN 24.4 bln, making it possible to sign new orders for a record value of PLN 7.3 bln. The value of its order portfolio reached PLN 10.3 bln at the end of December 2017 with largest segment, road infrastructure, constituting 45 pct of the order portfolio compared to 57 pct a year earlier. The contracts acquired from PKP PLK, which are worth PLN 1.3 bln, increased the share of the rail segment from 2 pct in December 2016 to 12 pct at the end of 2017. Furthermore, thanks to signing a contract for the construction of a flood protection reservoir in Racibórz Dolny, hydro-technical work currently accounts for 7 pct of the order portfolio. Budimex Group ended 2017 with net cash of PLN 2.2 bln, which was PLN 359 mln lower compared to December 31st, 2016.

“In 2017,Budimex Group increased its involvement in FBSerwis by over PLN 50 mln. We also invested PLN 80 mln in the expansion and modernisation of the machine park and over PLN 150 mln in land purchases in the property development segment,” explained Dariusz Blocher. “An important factor affecting the cash balance negatively was the deteriorating financial situation of subcontracting companies, caused by changes in VAT legislation, among other things. We are striving to support our subcontractors by offering early payments and by enabling frequent and efficient invoicing of work,” insists Budimex's CEO, who goes on to add: “In the coming years, the largest public investors, the General Directorate of National Roads and Motorways and PKP PLK, are planning a significant increase in expenditure. A period of increased work is ahead of us, which we are prepared for in terms of personnel and equipment.”

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