Consolidated profit and loss account of the Budimex Group
| CONSOLIDATED PROFIT AND LOSS ACCOUNT | 01.01 – 31.12.2018 | 01.01 – 31.12.2019 | Change | Change % |
|---|---|---|---|---|
| Net sales of finished goods, services, goods for resale and raw materials | 7 387 137 | 7 569 663 | 182 526 | 2,5% |
| Costs of products, services, goods and materials sold | (6 758 048) | (7 018 111) | (260 063) | 3,8% |
| Gross profit on sales | 629 089 | 551 552 | (77 537) | (12,3%) |
| Selling costs | (30 650) | (30 478) | 172 | (0,6%) |
| General and administrative costs | (229 593) | (198 992) | 30 601 | (13,3%) |
| Other operating revenues | 67 977 | 99 453 | 31 476 | 46,3% |
| Other operating costs | (63 824) | (103 141) | (39 317) | 61,6% |
| Profit on sales of subsidiaries | 44 011 | – | (44 011) | (100,0%) |
| Operating profit | 417 010 | 318 394 | (98 616) | (23,6%) |
| Financial revenue | 28 291 | 60 127 | 31 836 | 112,5% |
| Financial costs | (40 118) | (50 949) | (10 831) | 27,0% |
| Share in net (loss) of subsidiaries measured by equity method | (1 795) | 4 785 | 6 580 | (366,6%) |
| Gross profit | 403 388 | 332 357 | (71 031) | (17,6%) |
| Income tax | (97 904) | (103 506) | (5 602) | 5,7% |
| Net profit for the period | 305 484 | 228 851 | (76 633) | (25,1%) |
| of which per: | ||||
| – Company’s shareholders | 305 424 | 226 014 | (79 410) | (26,0%) |
| – non-controlling shares | 60 | 2 837 | 2 777 | 4628,3% |
As a capital group in 2019, we generated sales revenue in the sum of PLN 7,569,663 thousand, which represents increase by 2.5%, in comparison to figures for a corresponding period in 2018.
In 2019, construction and assembly production in Poland, expressed in current prices, increased by 6.0% compared to the same period of the previous year (an increase by 2.6% at constant prices), while our sales of the construction sector on the domestic market decreased by 0.3% in comparable periods.
In 2019, our gross profit on sales was PLN 551,552 thousand, in comparison with PLN 629,089 thousand in the previous year. Thus, in 2019, gross sales profitability was 7.3%, in comparison with 8.5% in 2018.
According to the accounting rules assumed, in case the budgeted costs for construction contract implementation exceed the total value of expected revenues, when this fact is identified, our companies create provisions for losses presented in the consolidated financial statement as “Provisions for construction contract losses”. As of 31 December 2019, provisions for contract losses amounted to PLN 240,677 thousand. In 2019, the balance of provisions for contract losses increased by PLN 82,642 thousand.
In the case of construction services, our companies are obliged to provide a guarantee for their services. As of 31 December 2019, the value of provisions for guarantee repairs amounted to PLN 480,711 thousand. In the 12-month period ended 31 December 2019, the balance of provisions for guarantee repairs increased by PLN 62,853 thousand, including the change in the composition of our capital group which caused an increase in the balance of provisions by PLN 264 thousand.
In comparison with the previous year, the sales costs in the period of 12 months ending on 31 December 2019 decreased by PLN 172 thousand, while the general management costs were lower by PLN 30,601 thousand than costs borne in 2018. The ratio of share of the total sales costs and general management costs decreased from 3.5% in 2018 to 3.0% in the following year.
In 2019, other operating revenues amounted to PLN 99,453 thousand and included, among others, received compensations and contractual penalties in the amount of PLN 38,463 thousand, release of reserves for penalties and sanctions in the amount of PLN 14,899 thousand, release of reserves for court cases and compensations in the amount of PLN 411 thousand, reversal of revaluation write-downs on receivables in the amounts of PLN 8,191 thousand, and write-downs on overdue liabilities in the amount of PLN 7,445 thousand. Moreover, in 2019, our companies disposed of certain elements of fixed assets, which enabled them to record a general profit in the amount of PLN 23,886 thousand. Additionally, in 2019, we recorded a profit from valuation of derivatives of the FX Forward type, obtained in order to limit the currency risks for construction contracts settled in foreign currencies in the amount of PLN 4,215 thousand.
In 2019, other operating costs amounted to PLN 103,141 thousand, including PLN 12,350 thousand of costs of write-downs on receivables, PLN 1,549 thousand for costs of write-downs on inventories. Costs of provisions for penalties and compensations amounted to PLN 71,787 thousand. The value of compensations and contractual penalties paid by our Group in 2019 amounted to PLN 9,107 thousand. In addition, we incurred costs of court fees and enforcement proceedings in the amount of PLN 2,299 thousand as a capital group. In addition, in 2019 we recorded a loss on the execution of FX Forward derivative instruments in the amount of PLN 3,774 thousand and we paid PLN 883 thousand as donations (data for the capital group).
In 2019, our Group showed an operating profit in the amount of PLN 318,394 thousand, which was 4.2% of the sales revenue value. In the previous year, the operating profit amounted to PLN 417,010 thousand, which was 5.6% of the sales revenue value.
In the period of 12 months ending on 31 December 2019, our Group recorded a profit on financial activity amounting to PLN 9,178 thousand, in comparison with the loss in the amount of PLN 11,827 thousand in 2018. Financial revenue for 2019 consisted primarily of interest of PLN 18,522 thousand, the acquisition of shares in the subsidiary in the amount of PLN 34,757 thousand, the release of provisions for guarantees and financial sureties of PLN 3,297 thousand and the valuation of receivables from the concession agreement of PLN 2,870 thousand.
In 2019, financial costs comprised, among others, the following: interest costs amounting to PLN 14,099 thousand, company incorporation/merger costs in the amount of PLN 4,443 thousand, bank commissions on guarantees in the amount of PLN 23,681 thousand, costs of discounted long-term receivables and liabilities under guarantee deposits amounting to PLN 6,886 thousand. In 2019, we also incurred a loss on the execution and valuation of interest rate swaps (concluded to reduce the interest rate risk) in the amount of PLN 1,426 thousand.
We closed the year of 2019 with a gross profit of PLN 332,357 thousand, in comparison to PLN 403,388 thousand in the previous year.
In 2019, the obligatory charge on the financial result resulting from the income tax amounted to PLN 103,506 thousand, including:
- the current part amounting to PLN 171,545 thousand;
- deferred part in the amount of PLN 68,039 thousand, decreasing the obligatory charge on the financial result resulting from the income tax for 2019.
As of 31 December 2019, our capital Group recognised the assets for deferred income tax in the amount of PLN 418,889 thousand, in comparison with PLN 361,851 thousand on 31 December 2018. The items of the financial statement relating to the deferred income tax in our Group result mostly from the specificity of construction contract settlements in which the moments of classifying costs as incurred and classifying revenues as fulfilled are different in the tax and accounting context.
The net profit assigned to Budimex SA shareholders for 2019 amounted to PLN 226,014 thousand, in comparison with PLN 305,424 thousand for 2018, which constitutes decrease by 26%. The net profit assigned to non-controlling interest for 2019 was PLN 2,837 thousand. In the previous year, this value amounted to PLN 60 thousand.