{"id":154598,"date":"2021-10-27T07:42:10","date_gmt":"2021-10-27T07:42:10","guid":{"rendered":"https:\/\/bdm-stg.mda.pl\/informacje-prasowe\/commentary-by-artur-popko-president-of-the-budimex-group-on-the-financial-results-after-the-first-three-quarters-of-2021\/"},"modified":"2024-06-07T11:19:30","modified_gmt":"2024-06-07T11:19:30","slug":"commentary-by-artur-popko-president-of-the-budimex-group-on-the-financial-results-after-the-first-three-quarters-of-2021","status":"publish","type":"press","link":"https:\/\/bdm-stg.mda.pl\/en\/press\/commentary-by-artur-popko-president-of-the-budimex-group-on-the-financial-results-after-the-first-three-quarters-of-2021\/","title":{"rendered":"Commentary by Artur Popko – President of the Budimex Group on the financial results after the first three quarters of 2021"},"content":{"rendered":"\n
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27.10.2021<\/p>\n

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Commentary by\u00a0Artur Popko – President of the Budimex Group on\u00a0the financial results after the first three quarters of 2021<\/h2>\n

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Share article<\/p>\n

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We\u00a0are satisfied with the results achieved in\u00a0the three quarters. Despite difficult market conditions, we\u00a0recorded an increase in\u00a0the Group\u2019s gross profit in\u00a0continuing operations (i.e. construction and services) from PLN 230 million for three quarters of 2020 to\u00a0PLN 389 million in\u00a0three quarters of 2021, while improving profitability from 4.1% to\u00a07.0%. Such a\u00a0good result is the result of an improvement in\u00a0the result of the construction and service parts, as\u00a0well as\u00a0the settlement of the result on\u00a0transactions between the construction and development segments in\u00a0the amount of PLN 68 million in\u00a0connection with the sale of Budimex Nieruchomo\u015bci \u2013 says Artur Popko \u2013 President of the Management Board of Budimex SA<\/p>\n

\n \"Budimex\n <\/p>\n

We\u00a0recorded a\u00a0slight decrease in\u00a0the Group\u2019s sales revenues, although revenues in\u00a0the service segment increased by\u00a030.8% and in\u00a0the construction area decreased by\u00a07.1%. Several important orders in\u00a0the road area are currently in\u00a0the design phase or\u00a0we\u00a0are waiting for a\u00a0permit for the implementation of a\u00a0road investment, which means that production under such contracts is relatively small.<\/p>\n

Construction and assembly production for the first three quarters of 2021 <\/strong>(in\u00a0current prices) increased by\u00a04.9% year-on-year from PLN 73.7 billion in\u00a02020 to\u00a0PLN 77.4 billion in\u00a02021<\/strong>. In\u00a0the buildings segment, sold production increased by\u00a03.4%, while in\u00a0the infrastructure area the increase was 6.4%.<\/p>\n

\n \"Construction\n <\/p>\n

\n The sales of the construction segment of the Budimex Group amounted to\u00a0PLN 5,118 million (-7.1% y\/y), while recording an improvement in\u00a0gross profitability from 3.5% to\u00a04.9%. <\/strong>\n <\/p>\n

\n \"Construction\n <\/p>\n

The scale of sales revenues for the nine months of 2021 is 7.1% lower than in\u00a0the corresponding period of the previous year. It is worth noting that the dynamics of decline in\u00a0Q3 was only -1.9% compared to\u00a0Q3 of the previous year. The dynamics of change is below the market indicator, which currently stands at\u00a04.9%.<\/p>\n

The gross margin of the construction segment amounted to\u00a04.9% and was higher compared to\u00a0the corresponding period of the previous year, when it amounted to\u00a03.5%. As\u00a0in\u00a0the previous two quarters, we\u00a0are experiencing a\u00a0significant increase in\u00a0material prices, but thanks to\u00a0the partial indexation mechanisms, as\u00a0well as\u00a0our policy of hedging the prices of key product ranges, we\u00a0are able to\u00a0maintain the originally assumed contract margin on\u00a0most projects.<\/p>\n

From January to\u00a0September 2021, we\u00a0obtained contracts worth PLN 5,879\u00a0\u00a0 million, while in\u00a0the \u201cwaiting room\u201d we\u00a0have further orders worth over PLN 1 billion, the largest of which is a\u00a0section of the S10 Bydgoszcz-Toru\u0144 expressway worth PLN 333 million. This is a\u00a0lower level than a\u00a0year ago, but our priority, invariably, is to\u00a0take care of the profitability of the order portfolio. At\u00a0the end of September 2021, the value of the order book reached PLN 14,021 million.<\/p>\n

The Budimex Group ended the third quarter of 2021 with a\u00a0net cash position of PLN 2.8 billion. <\/strong>In\u00a0June, for the 13th year in\u00a0a\u00a0row, we\u00a0paid a\u00a0dividend of PLN 426 million, which gave PLN 16.70
per share. On\u00a018 October 2021, we\u00a0also paid an interim dividend for 2021 in\u00a0the amount of PLN 14.90 per share (over PLN 380 million).<\/p>\n<\/p>\n

\n In\u00a0the period from January to\u00a0September 2021, the FBSerwis Group significantly increased its sales revenues and gross profit<\/strong>\n <\/p>\n

\n \"Services\n <\/p>\n

The dynamics of sales revenues in\u00a0the service segment amounted to\u00a030.8%. The revenues of the FBSerwis Group, which is the key asset within the segment, amounted to\u00a0PLN 561 million and increased by\u00a030.6% compared to\u00a0the previous year, which resulted from higher volumes in\u00a0the waste management segment. Gross profit amounted to\u00a0PLN 75 million compared to\u00a0PLN 52 million in\u00a0the corresponding period of the previous year.<\/p>\n

In\u00a0September 2021, companies from the FBSerwis Group won another tender for waste management from the city of Warsaw. We\u00a0are constantly increasing the economic potential of the FBSerwis Group, among others by\u00a0investing in\u00a0the expansion of the existing waste processing installations and landfills. Acquisition projects are also being carried out independently to\u00a0increase the scale of the Group\u2019s operations. At\u00a0the moment, we\u00a0are looking for companies that will help us achieve and at\u00a0the same time increase sales so that in\u00a02025 we\u00a0can reach 1 billion while maintaining the margin level.<\/p>\n

We\u00a0end the third quarter of 2021 with an order backlog of a\u00a0record PLN 14 billion.<\/strong> Analyzing the current portfolio and our work schedule, we\u00a0have a\u00a0chance to\u00a0end the year with a\u00a0better dynamics of sales revenues compared to\u00a0the result after three quarters.<\/p>\n

After taking into account the contracts in\u00a0the \u201cwaiting room\u201d, which we\u00a0plan to\u00a0sign in\u00a0the coming months, we\u00a0have a\u00a0largely secured work front until the end of 2023, which is why we\u00a0are selective about new offers, reliably and responsibly calculating cost estimates, especially in\u00a0the environment of dynamically changing prices.<\/p>\n

We\u00a0are closely monitoring the development of the situation in\u00a0the area of EU\u00a0funds, which are crucial for construction investments. We\u00a0believe that the talks on\u00a0the allocation of the Reconstruction Funds will be\u00a0successful and we\u00a0will be\u00a0able to\u00a0continue to\u00a0participate in\u00a0the implementation of construction projects in\u00a0Poland co-financed from EU\u00a0funds<\/p>\n

Recent quarters have brought significant increases in\u00a0the prices of materials that the construction market has to\u00a0face. That is why we\u00a0focus on\u00a0cost control, which allows us to\u00a0minimize the impact of negative market factors and, consequently, will enable us to\u00a0achieve profitability above market indicators. We\u00a0positively assess the impact of indexation clauses, which at\u00a0least partially compensate for the increase in\u00a0material prices. This can save many smaller companies from bankruptcy.<\/p>\n

In\u00a0the third quarter, we\u00a0 achieved the internally adopted internal goals in\u00a0terms of foreign expansion into neighbouring markets, i.e.: German, Slovak and Czech. We\u00a0have established special purpose vehicles on\u00a0the German, Czech and Slovak markets. On\u00a0the German market, we\u00a0are in\u00a0first place in\u00a0one of the tender procedures and we\u00a0are waiting for the selection of our offer. We\u00a0expect the first contracts to\u00a0be\u00a0signed in\u00a02022.<\/p>\n

We\u00a0are analysing the possibilities of entering new ventures, including photovoltaic and wind farm projects, where we\u00a0already have experience as\u00a0a\u00a0general contractor. We\u00a0are currently in\u00a0talks with several companies with which we\u00a0would like to\u00a0establish cooperation by\u00a0entering into ready-made projects, but also by\u00a0buying projects at\u00a0certain stages, which would allow us to\u00a0appear on\u00a0the green energy market as\u00a0an investor.<\/p>\n

The Budimex Group also invests in\u00a0innovative technologies, including green technologies, i.e.: reduction of the carbon footprint, effective waste management, storage of short-term and long-term energy, generation of electricity and heat from RES. We\u00a0are investigating the possibilities of using artificial intelligence in\u00a0the field of image recognition and analysis to\u00a0completely eliminate near-miss events in\u00a0the work of construction and machinery. In\u00a0October, we\u00a0are launching the Budimex Startup Challenge programme. We\u00a0are looking for young companies that share similar values to\u00a0ours and want to\u00a0modernize the construction industry.<\/p>\n

Despite the difficult environment, we\u00a0keep our contractual obligations and carry out the tasks entrusted to\u00a0us in\u00a0accordance with the regulations, while taking care of quality and maintaining the highest environmental and social standards. Recently, our efforts have been recognized with an award in\u00a0the Sustainable Economy Diamonds competition in\u00a0the Sustainable Construction Leader category. We\u00a0also won as\u00a0many as\u00a0five Construction of the Year 2020 awards, the most among all general contractors.<\/p><\/div>\n <\/div>\n

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We are satisfied with the results achieved in the three quarters. Despite difficult market conditions, we recorded an increase in the Group’s gross profit in continuing operations (i.e. construction and services) from PLN 230 million for three quarters of 2020 to PLN 389 million in three quarters of 2021, while improving profitability from 4.1% to 7.0%. …<\/p>\n","protected":false},"featured_media":149643,"parent":0,"template":"","press_type":[537,772,790],"acf":[],"yoast_head":"\nCommentary by Artur Popko - President of the Budimex Group on the financial results after the first three quarters of 2021 - Budimex<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Commentary by Artur Popko - President of the Budimex Group on the financial results after the first three quarters of 2021 - Budimex\" \/>\n<meta property=\"og:description\" content=\"We are satisfied with the results achieved in the three quarters. 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