2011-08-24
Halfway through the plan
- Hydrobudowa Polska Group has generated PLN 27.4 mil. of net profit and over PLN 742 mil. of revenues in the first half-year; therefore, the prognosis for 2011 was fulfilled in, respectively, 55% and 46%,
- GK HBP commenced the second half-year with an order book worth almost PLN 2 billion, and tenders with total worth of over PLN 890 mil.
- Introducing the cost reduction programme has already delivered some tangible effects
Consolidated revenue of Hydrobudowa Polska in the 2nd quarter of this year exceeded PLN 465 mil., and was similar to the one generated during the same period last year. Operating result of the group amounted to PLN 23.8 mil. (almost 3% less than in Q2 2010), while the net profit was PLN 18.6 mil. (-16%). For the entire first half-year, the revenues generated by GK HBP were over PLN 742 mil. (-6.5% year on year), operating income amounted to PLN 32.1 mil. (-11%), while the net profit was PLN 27.4 mil. (-12%).
Therefore, the rentability achieved in the 1st half-year of 2011 was slightly lower than in a similar period of the previous year, which is related, among other things, with an important change in the sales structure (increasing share of revenues generated by road engineering) However, the results achieved do not differ from the analysts' prognoses, and even exceed them to a small degree.
“Results achieved by construction companies are characterised by significant seasonality. In our case, last year was unusual – the first half-year was significantly better in terms of financial results than the second half-year. This year, judging the schedules of executed contracts, we expect a more or less even distribution of results for the first and the second half-year,” said Jarosław Dusiło, Economic Vice-President of Hydrobudowa Polska, andconcluded, “We are on the right track to fulfil the prognoses for this year.” As a reminder: in May, Hydrobudowa Polska published financial prognoses which assumed that the results achieved in 2011 shall amount to some PLN 50 mil. of net consolidated profit, with around PLN 1.6 bil. of revenues. During the first half-year, the plan was executed in, respectively, 55% and 46%.
As of the beginning of July, the worth of GK HBP order book amounted to almost PLN 2 bil, which almost guarantees achieving the planned amount of revenues in 2011, as well as largely fills the order book for the following year. Furthermore, the aforementioned value does not yet include the works that shall by assigned to the companies of Hydrobudowa Polska Group as a result of tenders to perform the 4th part of the project of Trasa Słowackiego in Gdańsk, including a tunnel under Martwa Wisła (the value of the winning bid is PLN 720 mil. net), and to convert the interchange Rondo Kaponiera in Poznań (PLN 170.3 mil. net) In those tenders, HBP bid together with PBG, Aprivia, PRG Metro (subsidiary of Hydrobudowa), and Spanish OHL.
In the order book of GK HBP, most contracts (as of 1st of July) are classified in the “Roads” sector (almost 47%), followed by contracts classified as „Water” (over 25%) and „Industrial and residential engineering”, including stadium engineering (almost 24%).
“ It isn't a secret that the rentability of infrastructural contracts is lower than the rentability achieved by us in the historically important “Water” sector. When analysing market opportunities, it is hard to expect better margins in engineering before the introduction of billion worth investments in the energetic sector. There is a very strong competition on the market, which is visible in the number of tender bids, as well as in the prices specified in those bids. That is why we keep restructuring our group in order to enhance its performance,” said Jerzy Ciechanowski, President of Hydrobudowa Polska.
The restructuring shall include, but won't be limited to, simplification of the group's structure by planned acquisition of Hydrobudowa 9 by HBP, liquidation of superfluous administrative structures, and outsourcing of organized parts of the enterprise. Despite the fact that the results of those actions will be fully visible in the next few years, the introduction of a cost reduction programme has already influenced the results presented herein. The overhead costs amounted to PLN 20.7 mil. in the first half-year, which is 19% less than in the same period of 2010. Therefore, the proportion of those costs in relation to the revenues diminished from 3.2% to 2.8%. The positive trend should also be visible in the results of GK HBP at the end of the year.