Warbud expects lower sales

2010-08-30

Warbud estimates that the company's sales revenue for 2010 will be lower than the corresponding figure for 2009 when the company posted PLN 1.8bn (€452.3m) revenue and profitability margin of 4%, as reported by Puls Biznesu.
The company estimates that its turnover will amount to around PLN 1.5bn (€376.9m) in 2010, with profitability slightly higher compared to the year earlier. The company's senior management has noticed the recent market recovery as the company has secured a decent number of new orders. Warbud sits on an order book exceeding PLN 800m (€201m) for the coming years. The company also expects to win contracts worth a similar amount by the end of the year. Currently, around 30% of the value of executed contracts concern environmental projects – for instance, the company will execute phase 2 of the Czajka sewage treatment plant in Warsaw and a waste incineration plant in Lodz. Furthermore, Warbud is preparing to get engaged in more environmental protection projects, including communal waste incineration plants in Ruda Slaska, Tychy, Szczecin and Lodz.
The remaining contracts are mostly public procurement orders in general construction. The company's order book also includes several road projects, but, in the opinion of the company's senior management, such contracts have been recently hard to win. A difficult market environment is due to strong competition and low margins in the segment. The company is building a bypass for Jaroslaw, S7 Elblag-Kalsk expressway, a section of S5 Gniezno-Poznan expressway and Antoninek interchange in Poznan.
Additionally, Warbud pins its hopes on the housing sector. While it had relatively few orders in this segment in 2009, Warbud has recently seen increased investor activity in the housing segment. The company also hopes to win contracts related to flood-protection projects (e.g. river regulation and construction of storage reservoirs). Warbud also focuses on orders from the power sector – to date, the company has concluded a contract with Energetyka Opole concerning reconstruction of a heating unit. Warbud has also participated in prequalification for contracts at Jaworzno and Kozienice power plants. The company intends to carry out these projects in consortium with other partners; it estimates its share in these contracts at around 30% of their value.

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