Outlook

GRI:

Prospects for the development of the activities of the Budimex S.A. and Budimex Group in the next year

In the coming year, the Budimex Group will continue to operate in all key sectors of the construction market in Poland, as well as in selected foreign markets.

The value of orders signed by the Budimex Group in 2020 was higher by 20% compared to the previous year. In 2021, the offerings of new tenders are expected to remain at a similar level, as the perspectives for the entire construction market for the current year and the next few years are good.

Despite temporary difficulties caused by the pandemic, the amounts planned for investments by the main contracting authorities, i.e. GDDKiA and PKP PLK, are stable and should be at a similar level to the expenditures from 2020. The investment expenditure of the main public contracting authorities is co-financed by European Union funds and the guarantee of funds in the new budgetary perspective 2021 – 2027 under the Infrastructure and Environment programme does not seem to be jeopardised. Moreover, Poland will receive funds from the Reconstruction Fund, which will be an additional source of investment financing, providing an impulse for further development of both the construction sector and the entire economy.

The Group plans to consistently reinforce its position in the commercial building sector and acquire new contracts in the industry - power engineering, railway and hydrotechnical segment. Its interests also include public-private partnership projects.

In 2020, the Budimex Group companies signed construction contracts of the total value of PLN 8,976,411 thousand (including addenda). As at 31 December 2020, the value of its construction project portfolio was PLN 12,721,460 thousand, which was an 18% increase compared to the end of 2019.

In turn, Budimex S.A. in 2020 signed construction contracts with a total value of PLN 8,596,982 thousand (with addenda). As at 31 December 2020, the project portfolio amounted to PLN 12,289,473 thousand.

The structure of the order portfolio of the Budimex Group as at 31 December 2020 was as follows:

Medium- and long-term perspectives for the development of Budimex depend mostly on projects in the two most important sectors in the Group’s portfolio, i.e. the infrastructure and rail industries.

The development of projects in these areas is defined in strategic documents at the national and European level. The most important documents which serve as the basis for making decisions on projects related to transport on the European level are:

  • European Green Deal, which is an action plan promoting sustainable economy. The ambition of the EU is to be climate-neutral by 2050. To achieve this goal, it is necessary to limit emissions in the transport sector by 90% by 2050 in relation to all types of transport, i.e. road, rail, air and water transport. In the first place, the European Union is planning to increase the role of railway and inland waterways in the inland transport of goods, 75% of which is currently road transport.
  • Sustainable and Smart Mobility Strategy, which sets out ten milestones, including for example: traffic on high-speed rail will double by 2030 and triple by 2050, and rail freight traffic will increase by 50% by 2030 and double by 2050.

The key document which determines the development of infrastructure and rail projects in Poland is the horizontal Strategy for Sustainable Transport Development until 2030, which sets out the most important directions for the development of transport in Poland until 2030. It is connected with assumptions related to the EU financial perspective for the years 2021-2027. Its main goal is to increase the availability of transport, improve the safety of road users and improve the effectiveness of the transport sector by creating a coherent, sustainable, innovative and user-friendly transport system at the national, European and global levels.

The achievement of this goal entails the implementation of the following six directions of intervention applicable to every branch of transport:

An important component in the development of the transport network in Poland is the construction of Solidarity Port – Central Communication Port (Port Solidarność – Centralny Port Komunikacyjny). The Central Communication Port is a planned intercharge which will be located between Warsaw and Łódź to integrate air, rail and road transport. As part of the project, Solidarity Airport will be built 37 km west of Warsaw and when the first stage of the project is completed, the airport will be able to serve 45 million passengers a year. The Central Communication Port involves rail projects as well: a junction in the vicinity of the airport and a network all over the country, which will make it possible to travel from Warsaw to the biggest Polish cities in no more than 2.5 hours. The railway component related to the Central Communication Port involves the construction of new railway lines and an upgrade of the existing ones.

Capital expenditure of the main public contracting authorities is co-financed by the European Union and it seems that it is safe thanks to funds guaranteed in the new budget perspective for the years 2021-2027 under the Operational Programme Infrastructure and Environment. Moreover, a new tool for financing construction projects, which will give a new impetus to the continuous development of the construction sector and the whole economy, will be the Recovery and Resilience Facility, which is the biggest fund out of all financial instruments aimed at rebuilding European economies after the pandemic caused by SARS-Cov-2. The Facility was proposed by the EC and approved by the European Council in July. It is worth EUR 750 billion and offers EUR 672.5 billion in the form of loans and subsidies to support reforms and investments made by EU countries.

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