2012 – a hard year

Budimex Group summarises its income for 2012. The company notes the decrease in value of contracts.

2012 was a difficult year for many construction companies – unfinished contracts, losses, employment reductions and bankruptcies. After almost 40 per cent decrease in the value of road tenders organised in 2011, there was a decrease by another 15 per cent in 2012, and as this segment of building industry amounted to 63 per cent in Budimex Group's order portfolio, the market situation had to affect Budimex as well – informs Dariusz Blocher, the President of the Board, the Managing Director of Budimex S.A.

The average value of contracts decreased in 2012 to PLN 39 million from PLN 78 million recorded in 2011. The company's order portfolio also decreased – from PLN 8,6 billion to PLN 4,9 billion.

In 2012 Budimex Group concluded contracts to the value of PLN 2,8 billion. In the previous year this amount came to PLN 5,3 billion, so a considerable decrease is clearly visible. The Group justifies it with decline in value of tenders organised and operations of companies aiming at keeping a "healthy" portfolio on diminishing market.

The Group informs of losses incurred due to Przędsiębiorstwo Napraw Infrastruktury (PNI) bought in 2011, which declared bankruptcy open to arrangement.

However, in spite of these difficulties and a visible slowdown in building sector, we are satisfied with financial results achieved in 2012, due to which Budimex is still the most valuable construction company on Warsaw Stock Exchange – emphasises Dariusz Blocher.

Results for 2012, ignoring the negative influence of PNI, the Group summarises as good ones. The company has noted a record in sales revenues to the amount of over PLN 6 billion, which means an increase by 10 per cent in comparison with the previous year. The operating profit came to more than PLN 182 million, whereas gross profit – PLN 203 million. This amount is also higher than in 2011.

In 2012 Budimex Nieruchomości recorded increase in sales by 30 per cent in comparison to 2011, and owing to higher profitability in developer activities than in construction, it significantly influenced Budimex Group's revenues increase – notices Dariusz Blocher. He emphasises also good results of Budimex Danwood, a company completely dependent on Budimex S.A., and profits generated on German market.

Generally, net cash position of Budimex Group decreased in 2012 by 25 per cent compared to the previous year and came to PLN 1 570 million.

As Dariusz Blocher summarises – The years 2013-2014 will be hard. We expect in 2013 a decline in building and assembly production. New road contracts financed from UE budget for the years 2014-2020 will appear in companies' portfolios presumably in the second half of 2014. There are to be many investments in "design and construct" system, so significant profits from their execution will appear only in 2015. Another challenges lie before us. Due to the decreasing road investments market, we are diversifying our operations.

The Group is going to deal with energetic and hydrotechnic investments and some not strictly related to building industry.


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