Financial resources management in the Budimex Group
As of 31 December 2022, the balance of cash and liquid deposits of the Budimex Group amounted to PLN 3,249,369 thousand and was PLN 533,574 thousand higher than the balance recorded as of 31 December 2021. The most important factors affecting the increase in the financial resources of the Budimex Group in 2022 include the following events:
- continued high profitability of construction activities,
- favourable changes in the components of net working capital in the construction segment, including an increase in the balance of advance contract payments,
- a significant increase in financial income from interest on cash due to increased interest rates, an increase in the cash balance in the companies of the FBSerwis Group, mainly due to the continued high profitability in the waste collection and management segment,
- payment of a dividend by Budimex SA in the amount of PLN 599,191 thousand in June 2022.
The strong cash position of the group allows it to participate in the largest tender procedures. In addition, in the current conditions, it generates additional interest income.
In accordance with the adopted policy, the group’s cash surpluses were placed as bank deposits at banks with high credit ratings. In addition, Budimex SA used cash surpluses to finance its suppliers of services and materials, which had a positive effect on their financial liquidity.
At the same time, the Budimex Group had external debt due to bank credits, loans and leasing, which, as of 31 December 2022, amounted to PLN 225,141 thousand (including PLN 131,482 thousand being the value of lease liabilities recognised in accordance with IFRS 16). The amount of the group’s external debt due to bank credits, loans and leasing, excluding liabilities recognised in accordance with IFRS 16, amounted to PLN 93,659 thousand and thus was lower by PLN 36,890 thousand compared to the state as of 31 December 2021. The amount of the group’s debt consisted mainly of:
- debt of Budimex SA, Budimex Kolejnictwo SA, Mostostal Kraków SA and companies of the FB Serwis Group under finance lease agreements (concluded to finance the purchase of tangible fixed assets),
- debt of Budimex Parking Wrocław Sp. z o. o. on account of credit to finance a concession project and a subordinated loan granted by a minority shareholder,
- debt of FB Serwis Kamieńsk Sp. z o. o. on account of a loan granted by the National Fund for Environmental Protection and Water Management to finance a project related to waste management.
During 2022, Budimex SA did not use credit lines to which it had access.
Persistently high interest rates in Poland in 2022 did not have a significant negative impact on the financial results of the Budimex Group through increasing interest costs due to:
- reduction of the external debt of the Budimex Group in recent years to a relatively low level of PLN 93,659 thousand,
- a fixed interest rate in the aforementioned loan from the National Fund for Environmental Protection and Water Management,
- concluded transactions hedging the interest rate risk in Budimex Parking Wrocław Sp. z o. o.
Liabilities due to bank credits and loans and other external financing sources PLN thousand
At the end of 2022, the group’s financing structure ratios approached the levels observed in previous reporting periods preceding the transaction of selling shares in Budimex Nieruchomości Sp. z o. o. This means that at the end of 2022, the assets to equity ratios were lower than a year ago, and the debt ratios were higher.
Capital structure durability ratios
Liquidity ratios (current and quick) at the end of 2022 decreased compared to previous years. The decrease in the value of liquidity ratios was mainly due to: an increase in the balance of the group’s short-term liabilities (negative impact on both liquidity ratios) and an increase in inventories, mainly related to construction activities (negative impact on the quick liquidity ratio).
Polski