FINANCIAL
POSITION
OF BUDIMEX
GROUP
Key economic and financial data of Budimex SA
The financial situation of Budimex SA in 2016 is characterised by selected items disclosed in the Statement of Financial Position and Profit and Loss Account (as below, together with the 2015 comparative data).
Statement of financial position of Budimex SA
The main items of the Company Statement of Financial Position as at 31 December 2016, compared to 31 December 2015, are presented in the table below:
| ASSETS | 31.12.2016 | 31.12.2015 | Change | Change % |
|---|---|---|---|---|
| Non-current assets | 1 387 569 | 1 316 650 | 70 919 | 5,4% |
| Property, plant and equipment | 92 668 | 61 821 | 30 847 | 49,9% |
| Investment properties | 3 762 | 3 888 | (126) | -3,2% |
| Intangible assets | 29 707 | 3 761 | 25 946 | 689,9% |
| Investments in subsidiaries | 724 473 | 724 323 | 150 | 0,0% |
| Investments in associates | 61 246 | 61 246 | 0 | 0,0% |
| Investments in other entities | 6 417 | 6 597 | (180) | -2,7% |
| Other financial assets | 16 537 | 6 666 | 9 871 | 148,1% |
| Trade and other receivables | 12 878 | 11 120 | 1 758 | 15,8% |
| Retentions for construction contracts | 39 835 | 35 404 | 4 431 | 12,5% |
| Deferred tax assets | 400 046 | 401 824 | (1 778) | -0,4% |
| Current assets | 3 232 437 | 2 625 013 | 607 424 | 23,1% |
| Inventories | 159 498 | 79 329 | 80 169 | 101,1% |
| Trade and other receivables | 462 329 | 379 325 | 83 004 | 21,9% |
| Retentions for construction contracts | 46 767 | 25 649 | 21 118 | 82,3% |
| Amounts due and receivable from customers under construction contracts | 290 016 | 155 241 | 134 775 | 86,8% |
| Other financial assets | 1 717 | 2 333 | (616) | -26,4% |
| Cash and cash equivalents | 2 272 110 | 1 983 136 | 288 974 | 14,6% |
| TOTAL ASSETS | 4 620 006 | 3 941 663 | 678 343 | 17,2% |
| EQUITY AND LIABILITIES | 31.12.2016 | 31.12.2015 | Change | Change % |
|---|---|---|---|---|
| Share capital | 145 848 | 145 848 | 0 | 0,0% |
| Share premium | 80 199 | 80 199 | 0 | 0,0% |
| Other reserves | 54 001 | 53 909 | 92 | 0,2% |
| Foreign exchange differences on the translation of foreign operations | 5 670 | 5 630 | 40 | 0,7% |
| Retained earnings/(losses) | 382 856 | 208 753 | 174 103 | 83,4% |
| Total shareholders’ equity | 668 574 | 494 339 | 174 235 | 35,3% |
| Liabilities | 3 951 432 | 3 447 324 | 504 108 | 14,6% |
| Long-term liabilities | 410 118 | 366 594 | 43 524 | 11,9% |
| Loans, borrowings and other external sources of finance | 29 374 | 11 551 | 17 823 | 154,3% |
| Retentions for construction contracts | 194 624 | 196 185 | (1 561) | -0,8% |
| Provisions for non-current liabilities and other charges | 180 765 | 153 495 | 27 270 | 17,8% |
| Retirement benefits and similar obligations | 5 348 | 5 358 | (10) | -0,2% |
| Other financial liabilities | 7 | 5 | 2 | 40,0% |
| Current liabilities | 3 541 314 | 3 080 730 | 460 584 | 15,0% |
| Loans, borrowings and other external sources of finance | 18 463 | 18 382 | 81 | 0,4% |
| Trade and other liabilities | 1 397 654 | 1 019 137 | 378 517 | 37,1% |
| Retentions for construction contracts | 174 635 | 158 641 | 15 994 | 10,1% |
| Amounts due and payable to customers under construction contracts | 1 337 780 | 1 229 015 | 108 765 | 8,9% |
| Deferred revenue | 408 741 | 464 616 | (55 875) | -12,0% |
| Provisions for current liabilities and other charges | 157 540 | 130 964 | 26 576 | 20,3% |
| Current tax liability | 45 272 | 58 313 | (13 041) | -22,4% |
| Retirement benefits and similar obligations | 1 025 | 926 | 99 | 10,7% |
| Other financial liabilities | 204 | 736 | (532) | -72,3% |
| TOTAL EQUITY AND LIABILITIES | 4 620 006 | 3 941 663 | 678 343 | 17,2% |
As at 31 December 2016, the total assets increased by PLN 678 343 thousand as compared to 31 December 2015, and amounted to PLN 4 620 006 thousand. Changes in the Statement of Financial Position were mainly related to the following events:
Non-current assets:
Non-current assets increased by PLN 70 919 thousand, which was mainly a result of the following events:
- an increase in the balance of property, plant and equipment by PLN 30 847 thousand, mainly due to the acquisition or acceptance for use under finance lease agreements of machinery and technical equipment in the amount of PLN 29 630 thousand,
- an increase in the balance of intangible assets by PLN 25 946, mainly following the purchase of computer software,
- an increase in the balance of financial assets by PLN 9 871 thousand, mainly as a result of the disbursement of another tranche of a loan to an associate, FBSerwis SA, in the amount of PLN 9 163 thousand,
- an increase in the balance of long-term retentions for construction contracts by PLN 4 431 thousand.
Current assets:
In the same period, the value of current assets increased by PLN 607 424 thousand, mainly as a result of the following events:
- an increase in the balance of cash and cash equivalents by PLN 288 974 thousand,
- an increase in the balance of amounts due and receivable from customers under construction contracts by the amount of PLN 134 775 thousand, mainly as a result of an increase in recognised sales adjustment over the invoiced sales in comparison to the previous year, in relation to the estimation of long-term contracts in accordance with their advancement level,
- an increase in the balance of trade and other receivables by PLN 83 004 thousand, mainly as a result of an increase in trade receivables by PLN 98 953 thousand,
- an increase in the balance of inventories by PLN 80 169 thousand, mainly as a result of the increased amount of materials in warehouses,
- an increase in the balance of retentions for construction contracts kept by customers by PLN 21 118 thousand.
Equity and liabilities:
On the side of equity and liabilities, the most significant changes referred to:
- an increase in the balance of current liabilities by PLN 460 584 thousand, mainly due to:
- an increase in trade and other payables by the amount of PLN 378 517 thousand,
- an increase in amounts due and payable to customers under construction contracts by PLN 108 765 thousand, which comprises an increase in recognised sales adjustment over the invoiced sales in relation to the estimation of long-term contracts in accordance with their advancement level by PLN 338 045 thousand and a decrease in the balance of provision for contract losses by PLN 229 280 thousand,
- a decrease in deferred revenue by PLN 55 875 thousand primarily in connection with the lower value of advances received against performance of contracts,
- a decrease in provisions for current liabilities and other charges by PLN 26 576 thousand, mainly due to a lower balance of provisions for warranty repairs by PLN 24 872 thousand,
- an increase in retentions for construction contracts by PLN 15 994 thousand,
- a decrease in current tax liability by PLN 13 041 thousand,
- an increase in non-current liabilities by PLN 43 524 thousand, mainly due to:
- an increase in provisions for non-current liabilities and other charges by PLN 27 270 thousand due to a higher balance of warranty repair provisions,
- an increase in loans, borrowings and other external sources of finance by PLN 17 823 thousand, following an increase in non-current lease liabilities,
- a decrease in retentions for construction contracts kept by customers by PLN 1 561 thousand.
Profit and Loss Account of Budimex SA
| PROFIT AND LOSS ACCOUNT | 01.01 - 31.12.2016 | 01.01 - 31.12.2015 | Change | Change % |
|---|---|---|---|---|
| Net sales of finished goods and services, goods for resale and raw materials |
5 207 194 | 4 768 675 | 438 519 | 9,2% |
| Cost of finished goods, services, goods for resale and raw materials sold | (4 570 979) | (4 355 182) | (215 797) | 5,0% |
| Gross profit on sales | 636 215 | 413 493 | 222 722 | 53,9% |
| Selling expenses | (11 665) | (11 157) | (508) | 4,6% |
| Administrative expenses | (179 368) | (172 749) | (6 619) | 3,8% |
| Other operating income | 38 677 | 52 201 | (13 524) | -25,9% |
| Other operating expenses | (54 951) | (33 978) | 20 973 | 61,7% |
| Operating profit | 428 908 | 247 810 | 181 098 | 73,1% |
| Finance income | 69 670 | 43 668 | 26 002 | 59,5% |
| Finance costs | (31 489) | (32 569) | 1 080 | -3,3% |
| Gross profit | 467 089 | 258 909 | 208 180 | 80,4% |
| Income tax | (85 173) | (50 901) | (34 272) | 67,3% |
| Net profit for the period | 381 916 | 208 008 | 173 908 | 83,6% |
Within the twelve-month period of 2016, Budimex SA generated revenues from sales in the amount of PLN 5 207 194 thousand, while in 2015 they amounted to PLN 4 768 675 thousand, i.e. a 9.2 per cent increase.
In 2016, gross profit on sales was PLN 636 215 thousand, while in the previous year it was PLN 413 493 thousand. The gross sales profitability ratio for 2016 was therefore 12.2 per cent and was higher than in 2015, when it reached 8.7 per cent.
Pursuant to the adopted accounting principles, the Company creates provision for contract losses if the budgeted costs exceed the total revenues under the agreement. In the subsequent periods, a part of the earlier created provision is reversed in proportion to the percentage of contract completion, after taking into account the total negative margin on the entire contract. As at 31 December 2015, the balance of the provision for contract losses amounted to PLN 629 426 thousand. In the twelve-month period ended 31 December 2016, the balance of the provision for contract losses was decreased by PLN 229 280 thousand.
The selling expenses in 2016 increased by PLN 508 thousand in comparison to the previous year, while the general administrative expenses grew by PLN 6 619 thousand. The share ratio of those expenses in the total sales amounted to 3.7 per cent in 2016 and 3.9 per cent in 2015.
Other operating income in the twelve-month period of 2016 amounted to PLN 38 677 thousand. That amount comprised mainly received compensations and liquidated damages in the amount of PLN 20 724 thousand, revenues due to a reversal of receivables and retentions impairment write-downs in the amount of PLN 3 505 thousand and of write-downs on inventories in the amount of PLN 975 thousand, as well as a write-off of overdue liabilities in the amount of PLN 2 545 thousand. At the same time, the Company reversed provisions for litigation and compensations in the total amount of PLN 8 950 thousand. In 2016, profit on disposal of non-financial non-current assets amounted to PLN 1 001 thousand and was lower than the profit generated in 2015 by PLN 12 919 thousand (a plot of land was sold in 2015, with a profit of PLN 11 819 thousand).
Other operating expenses in the twelve-month period ended 31 December 2016 amounted to PLN 54 951 thousand, of which PLN 10 654 thousand related to the value of created provisions for litigation and expected contractual liabilities, while the compensations and liquidated damages paid amounted to PLN 23 736 thousand. Moreover, the Company recognised impairment write-downs for receivables in the amount of PLN 14 196 thousand, for inventories in the amount of PLN 1 751 thousand and for non-current assets in the amount of PLN 1 677 thousand. In 2016, the Company also incurred a loss on the valuation and realisation of FX Forward derivative financial instruments and FX options in the amount of PLN 54 thousand.
In the twelve-month period of 2016, the Company reported a positive financial result of PLN 38 181 thousand. This was caused primarily by dividend income of PLN 36 586 thousand, net interest income of PLN 30 388 thousand, costs of discount of retentions for construction contracts – higher than in 2015 and amounting to PLN 6 109 thousand, costs of bank commissions and guarantees – higher than in the previous year and amounting to PLN 23 339 thousand, as well as loss on the liquidation of available-for-sale assets in the amount of PLN 154 thousand.
In 2016, the Company earned a gross profit of PLN 467 089 thousand, which means an increase by 80.4 per cent over the previous year.
Income tax for the 12 months of 2016 amounted to PLN 85 173 thousand, including:
- current tax – PLN 83 459 thousand,
- deferred tax – PLN 1 714 thousand.
In 2016, Budimex SA earned a net profit in the amount of PLN 381 916 thousand, which represents an increase by 83.6 per cent over 2015.