The Budimex Group achieved operating profit of PLN 417 million at profitability of 6.5%, whereas in the first quarter of this year the operating profitability was 3.6%, and 7.4% and 7.7% in the second and third quarter, respectively.
Gross profit of Budimex was PLN 466 million at the profitability of 7.3%. Profitability at the level of gross profit was supported by significant improvement in financial results, in particular in the second and third quarter, which resulted from an increase in the average level of interest rate of cash invested by the Budimex Group.
The Budimex Group recorded increase of revenue from sales of the Group at the level of 15.1% mainly due to the greater scale of implemented sales in the construction segment, in particular in connection with construction of buildings and Mostostal Kraków. In the services segment, revenues were similar to the previous year.
Construction and assembly production in Poland for three quarters of 2022 (at current prices) increased year-over-year by 22.2% from PLN 77.4 billion in 2021 to PLN 94.5 billion in 2022. In the buildings segment, production sold increased by 30.2%, while in the infrastructure segment the increase was 14.3%.
Sales of the construction segment of the Budimex Group was PLN 5 billion 809 million.
Despite market difficulties resulting from disturbed supply chains, sales in the three quarters of 2022 in the construction segment were noticeably higher compared to the same period of the previous year. The high order portfolio at the beginning of 2022, a well-thought-out purchasing policy and favourable weather conditions allowed us to increase revenues by over 13%.
In the last quarter, we observed a stabilisation of prices of key assortments, and in certain cases (e.g., steel), a drop of prices compared to the levels recorded several weeks after the outbreak of war. A responsible contracting strategy and a tailored purchasing strategy allowed us to keep losses associated with the current market situation to a minimum. The budgets of all our projects are updated on an ongoing basis, while profitability of the portfolio remains stable thanks to good profitability of the contracts in the final stages of execution.
During three quarters of 2022, we acquired contracts worth PLN 4.6 billion. Budimex Group’s contract portfolio at the end of September 2022 was PLN 12.5 billion and secures the work front until the end of 2023.
Thanks to intensive works on acquisition of new projects, the value of projects signed in October 2022 and awaiting to be signed is over PLN 3 billion, which should ensure stability of the order portfolio. These contracts include, e.g., construction of S17 Piaski-Hrebenne express road (2 sections of the total value of PLN 845 million), D1 Bratislava-Triblavina motorway in Slovakia (PLN 519 million), a Military Hospital in Kraków (PLN 368 million) or the Chabówka-Nowy Sącz railway line no. 104 (PLN 366 million).
The Budimex Group ended the third quarter of 2022 with a net cash result of PLN 2.2 billion. We paid the remaining dividend for 2021 of PLN 23.47 per share in June 2022.
Thus, the total dividend per share for 2021 was a record-breaking PLN 38.37.
After three quarters, the FBSerwis Group maintained a high level of sales revenues while maintaining good profitability.
Revenues of FBSerwis Group, which is a key asset within the services segment (the results of the services segment also include activities of several smaller companies, including Budimex Parking Wrocław) amounted to PLN 573 million and were slightly higher than in the same period of the previous year. The operating profit of the FBSerwis Group was PLN 64 million at the profitability of 11.2% compared to 13.8% in the same period of the previous year, whereas the profitability improved in the third quarter and was higher compared to the third quarter of the previous year.
Intensive works on obtaining new commissions, in particular in the infrastructure maintenance segment, allowed to significantly expand the order portfolio, which should translate into increase of revenue in subsequent quarters. We are continuing commenced investments in expansion of the existing waste processing installations and landfills. At the same time, we are integrating, as a part of the Group’s structure, an entity we have acquired several months ago, thus reinforcing our position in the environmental services segment.
In subsequent quarters, we will closely observe further macro-economic developments.
The current order portfolio of the Budimex Group fully secures the work front until the end of 2023, and the newly signed contracts (in particular “design and build” orders) provide a strong foundation for operations in the years 2024–2025. This is particularly important in the light of the economic slowdown and the planned limitation of new projects awarded by our Contracting Authorities, i.e., self-governments and PKP PLK.
The inflation indexes remain high, and the majority of forecasts for the coming quarters show that they will keep increasing. We are closely observing the prices of energy and fuel essential for the construction industry and the entire economy. For this reason, it is important to continue works on mechanisms of indexation of long-term orders.
We are preparing for implementation of the first significant projects outside Poland. The largest among them is the construction of D1 Bratislava-Triblavina motorway according to “design and build” method. Recently, we’ve been also awarded the first place in a tender for reconstruction of a railway infrastructure in Czech Republic of the total value of approx. PLN 66 million.
Budimex, in cooperation with Krakowski Park Technologiczny, has commenced an acceleration program for foreign start-ups – Poland Prize – financed from the funds of Polish Agency for Enterprise Development.
We are continuing our cooperation with start-ups awarded in the 1st edition of Budimex Startup Challenge contest. The following major topics continue to prevail in the area of innovations: solutions for the energy industry, renewable energy sources, as well as ecological technologies for the construction industry.
On 26 July 2022, a formal finale of Dom z Serca 2 campaign in Brusy, Pomorskie voivodeship, took place, as a part of which we have completed construction of a house for a family of 8. Thanks to all Partners of the campaign, we have made Mrs. Iwona’s, Mr. Krzysztof’s and their six kids’ dream come true. We are constructing the 41st and 42nd Parent Zone in hospitals in Ełk and Bydgoszcz.
In the third quarter, our constructions were given several valuable industry awards: 7 awards in “Budowa Roku 2021” contest, informally referred to as Construction Industry Oscars, and two “Modernizacja Roku” awards. The awarded investments include: PKN Orlen Research and Development Centre in Płock, PKP S.A. station in Białystok, and Młyny Rothera in Bydgoszcz.
The CSR strategy of Budimex assumes, e.g., being a good neighbour, guest and partner for local societies. During three quarters of 2022, we charitably supported surroundings of construction sites as a part of 41 projects in: Ełk, Szczecin, Bydgoszcz, Szczecin, Kraków, Warsaw, Dolice near Szczecin, Białystok, Narewka near Hajnówka, Czechowice – Dziecice, Suwałki, Marki near Warsaw, Słupca near Konin, and Strachocin. The total value of help was over PLN 1 million.
BUDIMEX SA is a company with over fifty years of tradition, which has a significant contribution to the economic development of Poland. With our work, we improve the quality of life of millions of Poles. During the 50 years of our existence, we have completed thousands of modern infrastructure, construction and industrial investments. The culture of innovation, improvement and following the principles of sustainable development allowed us to gain the position of a leader in the Polish construction market. Not only are we present on the Polish market, but also abroad. We gradually increase our involvement in the facility management (operation of real estate and infrastructure facilities) and waste management sectors. Since 1995, our company has been listed on the Warsaw Stock Exchange, and since 2011 it has been included in the ESG index – gathering the most responsible companies on the stock exchange. Its strategic investor is a Spanish company with global reach – Ferrovial. The group includes: Mostostal Kraków and FBSerwis.
We are one of the signatories of the Agreement for Safety in Construction – an initiative established in 2010, bringing together the largest general contractors in Poland in order to improve occupational safety in the construction industry.
More information is available at www.budimex.pl/en