China Railway Group’s revenues for the first quarter of the year rose +6.9% to CNY 126 billion (US$ 20.4 billion), and its operating profit was up +11.4% to CNY 2.82 billion (US$ 453 million). However, the contractor said it saw a sharp downturn in its order intake.
The company signed CNY 157 billion (US$ 25.3 billion) worth of new work over the first three months of the year, which was a -22.1% decline on the same period last year. It said the fall was “due to a decrease in projects available for bidding.”
The company’s backlog as of the end of March came to CNY 1,839 billion (US$ 296 billion), which represents about 44.5 months of work at the current rate. China Railway Group said the majority of this – more than 80% was for construction and infrastructure contracts, with the remainder being for services such as design, surveying and consulting, as well as engineering equipment and component manufacturing.
China Railway Group was ranked as the world’s third largest contractor in last iC’s ranking of the global top 200 construction companies, behind domestic rivals China State Construction & Engineering (CSCEC) and China Railway Construction Corporation.
All three companies are state-owned, and rumours have circulated over recent weeks that the Chinese government may seek to merge the two railway construction groups. This would create by far the world’s largest contractor, with annual revenues in the region of US$ 200 billion.