Financial Position
Managing of Finance at the Budimex Group
The cash balance of the Budimex Group as at 31 December 2013 amounted to PLN 1 658 783 thousand and was by PLN 341 050 thousand higher than as at 31 December 2012. In 2013, Budimex SA paid out a dividend in the amount of PLN 112 077 thousand. Generating cash assets at the above level was possible owing to positive profitability maintained by Group companies in 2013 as well as to sustained favourable tendencies in working capital at Budimex SA which took place in the second half of 2013. Besides, the sale of shares in Budimex Danwood Sp. z o.o. by Budimex B Sp. z o.o. significantly affected the increase of the cash balance in the Budimex Group providing the cash inflow of PLN 238 600 thousand.
In accordance with the Group’s policy, cash surpluses were placed as bank deposits at banks with a good rating. In addition, Budimex SA used cash surpluses to finance its suppliers of services and raw materials. This had a positive effect on the financial liquidity of these suppliers, and generated extra finance income for Budimex SA.
The Budimex Group entities reported an external debt in respect of bank loans and borrowings and other external sources of finance, including finance lease liabilities, which as at 31 December 2013 amounted to PLN 54 084 thousand and was by PLN 39 601 thousand lower than as at 31 December 2012 (see table below). The Group’s debt is mainly composed of the debt of Budimex SA under finance leases (concluded for the purpose of financing the purchase of property, plant and equipment – primarily machines and equipment for performing roadwork contracts) and the debt of Budimex Nieruchomości Sp. z o.o. under bank loans financing development activities.
| Liabilities due to bank loans and borrowings and other external sources of finance: | 31.12.2013 | 31.12.2012 |
|---|---|---|
| - long-term | 34 355 | 75 967 |
| - short-term | 19 729 | 17 718 |
| Total | 54 084 | 93 685 |
The following ratios illustrate the structure of finance at the Budimex Group:
| Ratio | 31.12.2013 | 31.12.2012 |
|---|---|---|
| Equity to assets ratio: (shareholders’ equity attributable to the shareholders of the Parent Company)/ (total assets) |
0,17 | 0,13 |
| Equity to non-current assets ratio: shareholders’ equity attributable to the shareholders of the Parent Company)/ (total non-current assets) |
1,01 | 0,77 |
| Debt ratio: total assets - shareholders’ equity attributable to the shareholders of the Parent Company)/ (total assets) |
0,83 | 0,87 |
| Assets to equity ratio: (total assets - shareholders’ equity attributable to the shareholders of the Parent Company)/ (shareholders’ equity attributable to the shareholders of the Parent Company) |
4,89 | 6,96 |
In 2013, all elements reflecting the Group's capital structure significantly improved. The equity to assets ratios increased and the indebtedness ratios decreased. This was possible because of significant increase of consolidated net profit of the Group and the related increase of its equity.
Furthermore, there was an improvement in liquidity ratios (see table below). This was possible thanks to a significant amount of cash generated both in the construction and in the development part as a result of high pre-booking of flats. Also the above transaction comprising sale of shares in Budimex Danwood Sp. z o.o. by Budimex B Sp. z o.o. had a significant positive impact on the liquidity ratios.
| Ratio | 31.12.2013 | 31.12.2012 |
|---|---|---|
| Current Ratio (current assets)/(current liabilities) |
1,14 | 1,10 |
| Quick Ratio (current assets - inventory)/(current liabilities) |
0,88 | 0,76 |
Due to the current very good financial standing of the Budimex Group and significant cash resources, there are no threats to the Group’s ability to finance its business activities in 2014.
