Current Activities And Development
Structure of sales revenue of the Budimex Group
Sales of the construction segment
In 2013, the construction market (measured by the value of sales of the construction and assembly production) decreased by 13.6 per cent in comparison to 2012. In the infrastructure sector, the adjustment was slightly higher and amounted to 18.6 per cent, while in the case of road investments (highways, expressways, streets and other roads) the decrease was significantly higher and amounted to 30.9 per cent because of strong limitation of expenses of the major investor, the General Directorate for National Roads and Highways (GDDKiA). The sector of facilities construction (residential and non-residential buildings) recognised negative dynamic at the level of 7.5 per cent.
In the discussed period, the value of sales in the construction segment of the Budimex Group was by 26.1 per cent lower when compared to 2012. Sales in the infrastructural construction segment decreased by 30.9 per cent, which was compliant with the general market trends, considering significant exposure of the Group to roads construction. In the case of facilities construction segment, the decrease reached the level of 18.0 per cent in comparison to 2012 and was a result of decreased value of orders received in 2012.
In 2013, a further decrease was recorded in sales in the infrastructure segment (from PLN 3 552 million in 2012 to PLN 2 456 million in 2013). However, the share of the infrastructural construction segment in total revenue from sales of the Group’s construction and assembly services decreased from 63 per cent in 2012 to 59 per cent in 2013.
The sales structure by individual segments of the construction market is presented in the table below:
| Type of construction | Sales value | |||
|---|---|---|---|---|
| 2013 | 2012 | |||
| PLN million | % | PLN million | % | |
| Civil engineering | 2 456 | 59% | 3 552 | 63% |
| Buildings, of which: | 1 685 | 41% | 2 054 | 37% |
| - non-residential buildings | 1 485 | 36% | 1 786 | 32% |
| - residential buildings | 200 | 5% | 268 | 5% |
| Total sales of construction and assembly services | 4 141 | 100% | 5 606 | 100% |
Development activities
In 2013, sales of the development business amounted to PLN 225 225 thousand thus recording over 30 per cent decrease compared to the previous year. Sales revenues on development activities are recognised upon transfer of the ownership title to a flat/premises to buyer after the technical acceptance report has been signed for the entire building. Notary sales of the flats depends on the dates of completion of the construction projects and delivery of finished flats to the customers. It is not a seasonal phenomenon and cannot be compared annually.
As a result of the factors specified in pt. 1.1 (general characteristics of the market), in 2013 a significant revival could be observed on the entire development market. It was directly reflected in very high level of pre-booking sale of the flats. In the year 2013, 742 flats were sold in the pre-booking system, compared to 515 flats sold in the prior year.
In order to ensure stability of the revenue from sales in the following years, in 2013 the development of more than 750 new flats was commenced in three development projects located in Warsaw, Kraków and Poznań. As at 31 December 2013, 1 071 flats were under construction. Simultaneously, the Group holds an extensive lands stock. Within the next few years, the Group plans its diversification by selling a part of the owned plots of land and purchasing new ones. Construction of over seven thousand of new flats is possible on the presently owned lands.
Major construction contracts concluded by the Budimex Group companies in the year 2013:
| Contract date | Contract value allocated to the Budimex Group | Customer | Type of construction |
|---|---|---|---|
| 2013-01-31 | 118 000 | KGHM Polska Miedź SA | Development of the halls, electricity and energy facility, development of the HPA together with the structure for equipment and installations |
| 2013-02-01 | 149 569 | General Directorate for National Roads and Highways | Continuation of construction of A4 highway, section Rzeszów Zachód - Rzeszów Centralny junction |
| 2013-02-11 | 137 753 | Medical University in Białystok | Rebuilding and Development of the University Clinical Hospital of the Medical University in Białystok |
| 2013-04-05 | 106 920 | "Polish Airports" State Enterprise in Warsaw | Development of the landing area at the Frederic Chopin Airport in Warsaw |
| 2013-04-05 | 88 930 | PRO-URBA INVEST Sp. z o.o. | Construction of apartments at ul. Sienna/Kolejowa in Warsaw - stage II |
| 2013-04-08 | 36 503 | Celowy Związek Gmin „PROEKOB” with its registered office in Bełżyce | Construction of the Waste Treatment Plant Bełżyce |
| 2013-04-30 | 42 981 | Zakład Gospodarki Wodno-Kanalizacyjnej in Tomaszów Mazowiecki | Modernisation of the water treatment plant in Tomaszów Mazowiecki |
| 2013-05-07 | 582 225 | Pomorska Kolej Metropolitalna SA | Designing and construction of Pomorska Kolej Metropolitalna Stage I - renovation of "Kolej Kokoszkowska" |
| 2013-05-07 | 399 001 | General Directorate for National Roads and Highways | Continuation of construction of A4 highway Tarnów - Rzeszów at the section from Krzyż junction to Dębica Pustynia junction |
| 2013-05-17 | 61 518 | The National Museum in Wrocław | Restoration and conversion of the Four Domes Pavilion (Pawilon Czterech Kopuł) |
| 2013-06-11 | 55 494 | Pomorska Investments Sp. z o.o. | Development of the Shopping Centre "Galeria Pomorska" in Bydgoszcz |
| 2013-07-17 | 130 857 | Jagiellonian University in Kraków | Construction of the building for the Faculty of Chemistry of the Jagiellonian University |
| 2013-07-23 | 59 900 | LC Corp Invest XII Sp. z o.o. | Construction of the A building for the first stage of the office and services investment in Katowice |
| 2013-08-23 | 88 475 | LEK SA | Development of the Production and Logistic Centre LEK SA in Stryków - construction of the Packing Centre LEK SA in Stryków |
| 2013-08-30 | 40 546 | Maritime Office in Słupsk | Protection of seashores within the area of the Central Proving Ground of the Air Force in Wicko Morskie |
| 2013-09-17 | 63 116 | Mikołaj Kopernik University in Toruń Collegium Medicum | Construction of the clinical facilities for the University Hospital in Bydgoszcz |
| 2013-09-19 | 43 860 | Warsaw University of Technology | Technology Transfer and Innovation Management Centre in the design and build system |
| 2013-10-08 | 37 584 + 1 521 | Jagiellonian University in Kraków | Completion of construction and assembly works in Paderevianum UJ (contract No. 1) and construction, assembly and installation works in the building of Małopolskie Centrum Biotechnologii UJ (contract No. 2). |
| 2013-11-28 | 44 469 | Miejski Zakład Komunikacyjny w Toruniu Sp. z o.o. | Reconstruction of the tram trackage at the city line from Toruń Miasto junction to Al. Solidarności |
| 2013-11-29 | 32 418 | Miejskie Przedsiębiorstwo Wodociągów i Kanalizacji in Warsaw | Technology modernisation in the Central Pipeline Facility, stage II |
Geographical structure of the Budimex Group sales in 2013
Construction activities on the German market
In 2013, only workshop services were rendered on the German market. Sales revenues in Germany amounted to PLN 156 291 thousand and were by PLN 8 942 thousand, i.e. 5.4 per cent, lower compared to 2012. The decrease occurred both on metal-related works (8.7 per cent) and prefabrication ones (3.8 per cent). The share of metal-related works in the sales structure decreased by 1.2 per cent in 2013 and amounted to 36.4 per cent. Gross profit generated in 2013 was by 3.9 per cent higher than in the prior year, which resulted mainly from lower costs of removing the defects of the works performed in previous years. Profitability achieved on prefabrication works was comparable to the one achieved in 2012, while on metal-related works it was higher than in 2012. Operating profit on the German market amounted to PLN 20 104 thousand in 2013, while in 2012 it amounted to PLN 18 154 thousand. Customer structure in both segments shows dispersion and the share of each customer in total sales revenue does not exceed 10 per cent.
