Financial Position
Key economic and financial data of the Budimex Group
The financial situation of the Budimex Group in 2013 is characterised by selected financial and economic data disclosed in the Statement of Financial Position and the Profit and Loss Account (broken down below together with the 2012 comparative data).
Consolidated statement of financial position of the Budimex Group
The main items of the Consolidated Statement of Financial Position of the Budimex Group as at 31 December 2013, compared to 31 December 2012, are presented in the table below:
| ASSETS | 31.12.2013 | 31.12.2012 | Change | Change % |
|---|---|---|---|---|
| Non-current assets | 622 230 | 559 807 | 62 423 | 11,2% |
| Property, plant and equipment | 83 755 | 111 192 | (27 437) | -24,7% |
| Investment properties | 24 529 | 3 256 | 21 273 | 653,3% |
| Intangible assets | 4 106 | 2 992 | 1 114 | 37,2% |
| Goodwill of subsidiaries | 73 237 | 73 237 | - | 0,0% |
| Investments in equity accounted entities | 3 518 | 16 966 | (13 448) | -79,3% |
| Available-for-sale financial assets | 8 381 | 17 135 | (8 754) | -51,1% |
| Retentions for construction contracts | 24 804 | 19 202 | 5 602 | 29,2% |
| Trade and other receivables | 20 703 | - | 20 703 | 100,0% |
| Concession agreement receivables | 22 376 | - | 22 376 | 100,0% |
| Derivative financial instruments | 692 | - | 692 | 100,0% |
| Long-term prepayments | 4 793 | 4 176 | 617 | 14,8% |
| Deferred tax assets | 351 336 | 311 651 | 39 685 | 12,7% |
| Current assets (short-term) | 3 064 523 | 2 888 404 | 176 119 | 6,1% |
| Inventories | 697 046 | 876 206 | (179 160) | -20,4% |
| Loans granted and other financial assets | 3 164 | - | 3 164 | 100,0% |
| Trade and other receivables | 525 675 | 401 836 | 123 839 | 30,8% |
| Retentions for construction contracts | 18 217 | 49 419 | (31 202) | -63,1% |
| Amounts due and receivable from customers under construction contracts | 146 630 | 227 490 | (80 860) | -35,5% |
| Current tax assets | 331 | 935 | (604) | -64,6% |
| Derivative financial instruments | 131 | 5 724 | (5 593) | -97,7% |
| Cash and cash equivalents | 1 658 783 | 1 317 733 | 341 050 | 25,9% |
| Short-term prepayments | 14 546 | 9 061 | 5 485 | 60,5% |
| TOTAL ASSETS | 3 686 753 | 3 448 211 | 238 542 | 6,9% |
| EQUITY CAPITAL AND LIABILITIES | 31.12.2013 | 31.12.2012 | Change | Change % |
|---|---|---|---|---|
| Shareholders’ equity attributable to the shareholders of the Parent Company | 626 323 | 433 130 | 193 193 | 44,6% |
| Share capital | 145 848 | 145 848 | - | 0,0% |
| Share premium | 87 163 | 234 799 | (147 636) | -62,9% |
| Other reserve capitals | 4 584 | 2 705 | 1 879 | 69,5% |
| Foreign exchange differences on translation of foreign operations | 5 101 | 2 190 | 2 911 | 132,9% |
| Retained earnings | 383 627 | 47 588 | 336 039 | 706,1% |
| Non-controlling interests | 18 852 | - | 18 852 | 100,0% |
| Total shareholders’ equity | 645 175 | 433 130 | 212 045 | 49,0% |
| Liabilities | 3 041 578 | 3 015 081 | 26 497 | 0,9% |
| Non-current liabilities | 347 985 | 382 378 | (34 393) | -9,0% |
| Loans, borrowings and other external sources of finance | 34 355 | 75 967 | (41 612) | -54,8% |
| Retentions for construction contracts | 161 347 | 161 143 | 204 | 0,1% |
| Provisions for non-current liabilities and other charges | 147 676 | 141 521 | 6 155 | 4,3% |
| Retirement benefits and similar obligations | 4 381 | 3 747 | 634 | 16,9% |
| Derivative financial instruments | 226 | - | 226 | 100,0% |
| Current liabilities | 2 693 593 | 2 632 703 | 60 890 | 2,3% |
| Loans, borrowings and other external sources of finance | 19 729 | 17 718 | 2 011 | 11,4% |
| Trade and other liabilities | 1 217 984 | 1 287 594 | (69 610) | -5,4% |
| Retentions for construction contracts | 189 466 | 222 146 | (32 680) | -14,7% |
| Amounts due and payable to customers under construction contracts | 689 915 | 534 870 | 155 045 | 29,0% |
| Prepayments received | 276 325 | 274 050 | 2 275 | 0,8% |
| Provisions for current liabilities and other charges | 120 126 | 116 060 | 4 066 | 3,5% |
| Current tax liability | 16 147 | 6 225 | 9 922 | 159,4% |
| Retirement benefits and similar obligations | 1 117 | 1 036 | 81 | 7,8% |
| Derivative financial instruments | 499 | 257 | 242 | 94,2% |
| Short-term accruals | 156 931 | 161 608 | (4 677) | -2,9% |
| Short-term deferred income | 5 354 | 11 139 | (5 785) | -51,9% |
| EQUITY CAPITAL AND LIABILITIES | 3 686 753 | 3 448 211 | 238 542 | 6,9% |
As at 31 December 2013, consolidated total assets increased by PLN 238 542 thousand compared to 31 December 2012, mainly due to a 11.2 per cent (PLN 62 423 thousand) increase in non-current assets and a 6.1 per cent (PLN 176 119 thousand) increase in current assets.
Non-current assets (long-term):
Increase in the value of non-current assets as at 31 December 2013 compared to 31 December 2012 was caused mainly by the following:
- a decrease in the balance of property, plant and equipment by PLN 27 437 thousand, mainly due to a change in the composition of the Group in the amount of PLN 5 771 thousand and due to a depreciation charge in the amount of PLN 26 446 thousand. Capital expenditures of PLN 9 537 thousand were allocated towards property, plant and equipment,
- increase in the balance of investment properties by PLN 21 273 thousand, due to change in the composition of the Group in the amount of PLN 20 225 thousand,
- increased balance of receivables due to concession agreement by PLN 22 376 thousand as a result of consolidation of Budimex Parking Wrocław Sp. z o.o. from 2013 and further development of the car park,
- increase in the balance of assets due to deferred income tax by PLN 39 685 thousand as a result of creating assets in the amount of PLN 16 824 thousand, use of the reserve in the amount of PLN 20 087 thousand and change in the composition of the Group in the amount of PLN (2 862) thousand, as well as other changes in the amount of PLN 5 636 thousand.
Current assets (short-term):
In the same period, the value of current assets increased by PLN 176 119 thousand, mainly as a result of an increase in:
- the balance of trade and other receivables by PLN 123 839 thousand,
- the balance of cash and cash equivalents by PLN 341 050 thousand,
with a simultaneous decrease in:
- amounts due and receivable from customers under construction contracts by PLN 80 860 thousand,
- balance of inventories by PLN 179 160 thousand, mainly related to the development business and a change in the Group’s composition.
Equity capital and liabilities:
On the side of equity capital and liabilities the changes referred to:
- a decrease in the value of non-current liabilities by PLN 34 393 thousand, mainly due to a decrease in the balance of credits, loans and other external financing sources by PLN 41 612 thousand, with an increase in the balance of reserves for non-current liabilities by PLN 6 155 thousand,
- increase in current (short-term) liabilities by PLN 60 890 thousand, of which the greatest changes were related to the following:
- a decrease in trade and other liabilities by PLN 69 610 thousand,
- a decrease in the balance of short-term retentions for construction contracts by PLN 32 680 thousand,
- an increase in amounts due and payable to customers under construction contracts by PLN 155 045 thousand.
Consolidated Profit and Loss Account of the Budimex Group
| CONSOLIDATED PROFIT AND LOSS ACCOUNT | 01.01 - 31.12.2013 | 01.01 - 31.12.2012 | Change | Change % |
|---|---|---|---|---|
| Net revenue from sales of products, services and goods for resale and raw materials | 4 749 459 | 6 077 660 | (1 328 201) | -21,9% |
| Cost of finished goods, services, goods for resale and raw materials sold | (4 354 043) | (5 617 789) | 1 263 746 | -22,5% |
| Gross profit on sales | 395 416 | 459 871 | (64 455) | -14,0% |
| Selling expenses | (28 364) | (24 371) | (3 993) | 16,4% |
| Administrative expenses | (162 917) | (193 362) | 30 445 | -15,7% |
| Other operating income | 44 181 | 65 780 | (21 599) | -32,8% |
| Other operating expenses | (107 991) | (139 172) | 31 181 | -22,4% |
| Profit (loss) on derivative financial instruments | (1 131) | 13 663 | (14 794) | -108,3% |
| Profit on disposal of a subsidiary | 194 112 | - | 194 112 | 100,0% |
| Profit on operating activities | 333 306 | 182 409 | 150 897 | 82,7% |
| Financial income | 30 498 | 67 063 | (36 565) | -54,5% |
| Finance costs | (28 256) | (40 723) | 12 467 | -30,6% |
| Profit (loss) on derivative financial instruments | 407 | - | 407 | 100,0% |
| Shares in net profits (losses) of subsidiary companies valued using equity method | (4 684) | (6 121) | 1 437 | -23,5% |
| Gross profit | 331 271 | 202 628 | 128 643 | 63,5% |
| Income tax | (29 971) | (16 646) | (13 325) | 80,0% |
| Net profit for the period | 301 300 | 185 982 | 115 318 | 62,0% |
| of which: | ||||
| Attributable to the shareholders of the Company | 300 480 | 185 982 | 114 498 | 61,6% |
| Attributable to non-controlling interests | 820 | - | 820 | 100,0% |
In 2013, the Budimex Group earned a sales revenue of PLN 4 749 459 thousand, which represents a 21.9 per cent decrease compared to the result for 2012.
Gross profit on sales in 2013 was PLN 395 416 thousand, while in the previous year it amounted to PLN 459 871 thousand. The gross sales profitability ratio for 2013 was therefore 8.33 per cent, while for 2012 it was 7.57 per cent.
In accordance with the adopted accounting policies, where budgeted contract costs exceed the entire expected contract revenues, Group companies create provisions for expected contract losses and recognize them under “Amounts due and payable to customers under construction contracts”. In subsequent periods, a part of the earlier created provision is reversed in proportion to the percentage of contract completion, after taking into account a total negative margin on the entire contract. As at 31 December 2013, the balance of the provision for contract losses amounted to PLN 209 367 thousand. In 2013, the balance of the provision for contract losses decreased by PLN 19 072 thousand, of which PLN 594 thousand was due to starting the consolidation of Elektromontaż Poznań SA.
- Compared to the prior year, selling expenses increased in the twelve-month period ended on 31 December 2013 by PLN 3 993 thousand, while administrative expenses were by PLN 30 445 thousand lower than the expenses incurred in 2012. The share of the sum total of selling and administrative expenses in total sales revenue increased from 3.58 per cent in 2012 to 4.03 per cent in the current year.
- Other operating income in 2013 was PLN 44 181 thousand and comprised, among others, received compensations and liquidated damages in the amount of PLN 20 174 thousand, reversal of the provision for penalties and sanctions in the amount of PLN 2 452 thousand, reversal of impairment write-downs against receivables in the amount of PLN 4 146 thousand, reversal of the write-downs for inventories in the amount of PLN 3 582 thousand, reversal of provision for restructuring in the amount of PLN 2 354 thousand, as well as deduction of overdue liabilities in the amount of PLN 3 113 thousand. In addition, in 2013, Group companies sold property, plant and equipment and investment properties and earned a profit on those sales in the total amount of PLN 1 854 thousand. The net value of the property, plant and equipment sold in 2013 was PLN 3 581 thousand.
- Other operating expenses in the 12-month period ended on 31 December 2013 amounted to PLN 107 991 thousand, of which PLN 15 721 thousand related to impairment write-downs against receivables, PLN 61 881 thousand – to recognised impairment write-downs against inventories (mainly in the development activities). The costs of recognized provision for litigation amounted to PLN 3 633 thousand and recognized provision for claims and penalties amounted to PLN 13 817 thousand. The value of compensations and liquidated damages charged to the Group result in 2013 was PLN 9 983 thousand.
- In 2013, the Group reported losses on valuation and realization of FX Forward derivative financial instruments (made with a view to limiting the FX risk on foreign currency construction contracts) in the amount of PLN 1 131 thousand.
- On 2 December 2013, the Group sold its shares in Budimex Danwood Sp. z o.o. and earned the profit in the amount of PLN 194 112 thousand.
- In 2013, the Group reported an operating profit of PLN 333 306 thousand, representing 7.02 per cent of total sales revenues, while in the previous year – an operating profit of PLN 182 409 thousand, representing 3.00 per cent of sales revenues.
- In the 12-month period ended 31 December 2013, the Group reported a profit on financing activities of PLN 2 242 thousand, while in 2012 – a profit of PLN 26 340 thousand. Finance costs in 2013 represented, among others, interest costs of PLN 5 513 thousand, bank commissions on guarantees and loans of PLN 13 684 thousand paid by Group companies, cost of discounting ong-term receivables and liabilities arising from guarantee deposits in the amount of PLN 7 053 thousand, surplus of negative exchange rate differences in the amount of PLN 1 813 thousand. Finance income in 2013 represented mainly interest received in the amount of PLN 29 725 thousand and valuation of receivables due to concession agreement in the amount of PLN 524 thousand.
- In 2013, the Group reported gains on valuation of interest rate swap derivative financial instruments (made with a view to limiting the interest rate risk) in the amount of PLN 407 thousand.
In 2013, the Group reported a gross profit of PLN 331 271 thousand, while in the previous year – a gross profit of PLN 202 628 thousand.
Income tax charge for 2013 was PLN 29 971 thousand, of which:
- current tax: PLN 66 697 thousand,
- deferred tax: PLN (36 726) thousand.
As at 31 December 2013, the Group recognised deferred tax assets in the amount of PLN 351 336 thousand, while as at 31 December 2012 the Group recognised a deferred tax asset of PLN 311 651 thousand. Items of deferred tax asset reported in the Statement of Financial Position result mainly from the specific method of settlement of construction contracts, under which the moment of recognition of costs as incurred and revenue as earned is different from the tax and accounting perspective.
The net profit attributable to the shareholders of Budimex SA for 2013 was PLN 300 480 thousand, while the net profit attributable to the shareholders of Budimex SA for 2012 was PLN 185 982 thousand.
Net profit attributable to non-controlling interest for 2013 amounted to PLN 820 thousand. There was no net result attributable to non-controlling interest in the same period of the previous year.
