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General contractors in shtuck

Alex Hayes 20 December 2018

Alex Hayes


+48 22 356 25 20

Alexander Hayes is currently working as a journalist for Eurobuild Central & Eastern Europe magazine. Originally from the UK, he moved to Poland in 1995 and has been working in real estate for over four years. He has a BA in english literature from the University of Buckingham.

General contractors in shtuck
POLAND The 22 construction companies listed on the Warsaw Stock Exchange have made aggregate losses for the fourth straight quarter, according to the ‘Construction Market in Poland – December 2018’ report by Spectis.

Furthermore, the third quarter was the second consecutive period that the profitability of property developers also fell, although they were still in profit. The financial results of suppliers to the building industry remained solid.

These claims have been made despite the construction industry reporting aggregate profits in Q3 2018, totalling PLN 170 mln, which compares to PLN 162 mln for the same period in the previous year.

“Still, the positive financial performance does not mean that the construction industry’s financial standing is robust because the companies usually deliver positive results in the third quarter of the year. Therefore, the sector’s actual performance is more accurately reflected by a twelve-month rolling total, which reveals a net loss of PLN 281 mln for the trailing four quarters [Q4 2017-Q3 2018],” write the authors of the report. This compares to a net loss of PLN 288 mln at the end of the previous quarter [Q3 2017-Q2 2018].

Unlike suppliers or property developers, construction companies have limited ability to pass on rising costs to their final customers. When they attempt to do so, the contracts are often cancelled with an estimated 15-20 pct of construction work orders in 2018 cancelled due to the fact that the bids made came in over-budget.

Among contractors in Q1-Q3 2018, Budimex stood out with a net profit of nearly PLN 231 mln, compared to PLN 337 mln a year earlier. Unibep, Instal Kraków, Dekpol and Mirbud, whose business operations include both construction services and property development, also reported sustainable earnings. However, overall contractor losses were dominated by the results of Elektrobudowa, PBG, Mostostal Warszawa and Vistal Gdynia. All of these companies have a core business that focuses on civil engineering work commissioned by public authorities.

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