GRI:

Sale of the construction segment

In 2020, the construction market (measured by the sales value of construction and assembly production) increased by 0.4% compared to 2019, showing a much lower increase in 2019 compared to 2018. The increase occurred in the infrastructure construction sector (+1.2%), while the production volume in the residential construction sector decreased by 0.5%.

The increase in sales in the construction segment of the Budimex Group, compared to 2019, was 5.4%

The share of the infrastructural segment in the total revenue from Group’s construction and assembly services increased from 43.2% in 2019 to 44.4% in 2020. As a result of acquiring new railway contracts, the share of this segment in the structure of revenues of the Group's construction segment increased from 16.6% in 2019 to 20.9% in 2020. The share of residential, commercial and industrial construction decreased from 40.1% in 2019 to 34.7% in 2020.

Sales structure by sectors of the construction market is presented in the table below:

Facility type Sales value
2020 2019
million PLN % million PLN %
civil – engineering (infrastructure) 3.347 44.4% 3.092 43.2%
rail 1.577 20.9% 1.19 16.7%
commercial, including: 2.615 34.7% 2.87 40.1%
- non-residential 2.055 27.3% 2.215 31%
- residential 560 7.4% 655 9.1%
total sales in the construction segment 7.539 100% 7.152 100%

Property development

In 2020, revenue from the sale of property development amounted to PLN 673,564 thousand, with an increase of 21% compared to the previous year.

Revenue from the sale of property development is recognised at the moment of transferring the ownership title to the flat/premises to the buyer, after the commissioning of the entire facility. Therefore, the notarial sales of apartments depend on the completion dates of construction projects and the delivery of finished apartments to customers and is not a seasonal phenomenon or one which is possible to compare year-to-year.

In 2020, the pre-sales of the development sector amounted to 1,672 apartments and was slightly higher (17 apartments) than in the previous year. The demand for new apartments throughout 2020 proved stable, despite a noticeable drop in pre-sales in March – April, i.e. the period of close closure of the economy. The main drivers of pre-sales were low interest rates and rising inflation pressure, which resulted in the transfer of free funds from banks to the real estate sector.

As a result of commencing the construction of ten new housing projects, the land bank decreased from the level of approx. 8 thousand apartments at the end of 2019 to approx. 6.5 thousand at the end of 2020.

At the beginning of the second half of 2020, the Management Board of Budimex S.A. decided to initiate a review of strategic options of the development segment, as part of which it decided to analyse scenarios including the acquisition of a significant investor or investors, sale of shares or listing the company on the Warsaw Stock Exchange. As a result of the review, on 22 February 2021 Budimex S.A. concluded a conditional agreement for the sale of 100% of shares in Budimex Nieruchomości Sp. z o.o. to CP Developer S.ar.l.

Main markets where Budimex Group operates are:

  • Poland
  • Germany
  • Lithuania

Geographic structure of sales revenue in 2020 is as follows:

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