Budimex still positive

30 July 2015

First half results at Polish contractor Budimex have continued the positive trends seen in the first quarter, with the company reporting high sales volumes and improved profitability.

It emphasised the “considerable effectiveness” of its bids for road contracts, claiming that it had submitted the best bids for 30% of the contracts announced by GDDKiA (Poland’s General Road & Motorways Authority) over the past few months.

It also highlighted the current level of the group’s order portfolio, which stands at PLN7 billion (€1.7 billion) at the moment.

Sales of the Budimex Group for the first half of 2015 were PLN2.27 billion (€547.04 million) – 5.3% higher than in the same period of 2014.

Dariusz Blocher, chairman of the management board, said that sales in the construction segment remained the major driver of the group’s sales. In the first half of this year, they were said to be 10.6% higher than the sales recorded in the first half of 2014.

In the second quarter of this year, the Budimex Group claimed to have improved its results and profitability at all levels of its activity. The operating profit earned in this period increased by 42.8% over the same period last year, and the result before tax increased by 55.5%.

Blocher said that the improved profitability in the construction business had resulted, among other things, from more effective contract management.

He said, “The price level of construction materials is still a source of positive surprise. The margins earned in the second quarter of 2015 in the infrastructure segment are thus higher than those of 2014.”

In the second quarter of this year, the Budimex Group signed contracts to the overall value of PLN1.84 billion (€443.8 million), of which 66% was in the infrastructure segment. The company said that the value of contracts signed in the first half of 2015, therefore, totalled PLN2.88 billion (€694.6 million). This was nearly double the figure for the first half of last year.

Blocher added, “Additionally, the value of contracts for which Budimex submitted the best bids in terms of price, reached the historically high level of PLN3.4 billion (€820.1 million), of which PLN2.8 billion (€675.4 million) were road contracts.”

He added that this could lead to record levels for the year.

The value of the order portfolio of the Budimex Group at the end of June 2015 was 78% up on the value at the end of June 2014, at PLN6.99 billion (€1.69 billion).

Blocher said, “The market is still characterised by high level of competition observed in the first quarter of 2015. New players emerged in the road segment, apart from the existing ones. However, Budimex is focused not only on volume but also on the profitability of the building order portfolio, particularly when it comes to contracts signed on design-and-build basis.”

He added, “Such projects are more demanding, and their completion period is longer. Therefore, it is of key importance that each tender procedure is carefully analysed and work is started from the moment of bid submission.”

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