The Erbud Group presented a summary of the first half of 2018. It shows that the company recorded a net loss of PLN 29.9 million. Erbud ended the same period last year with a profit of PLN 7 million.
The authorities of the Erbud group admit that the main reason for the losses they recorded is the overestimation of margins. The company explains the constantly growing number of private and public investments. This results in an increase in the price of construction materials, difficulties in obtaining qualified labor, and rising employment costs.
“The rapid volatility of the market environment has drastically shaken the stability of the construction industry’s results. In the case of the ERBUD Group, the decline in margins applies especially to the cubature segment, both in Poland and Germany. Several contracts calculated and signed between the beginning of 2015 and the second half of 2017 showed negative profitability. Since then, the operating costs of construction companies have increased significantly.” – explains Dariusz Grzeszczak, President of the Management Board of Erbud SA
However, the group reassures that thanks to cash collateral, its situation is stable and safe. In the first half of 2018, the German company IVT belonging to the group also achieved very good results. Its revenues increased by 50%. compared to last year. The total revenues of the Erbud Group amounted to PLN 960 million at the end of June 2018 and increased by 24% year on year. In turn, foreign sales increased by 50%, to PLN 139 million, thanks to the acquisition of the German company IVT operating in the engineering and service sectors for industry and energy. IVT’s revenues in the first half of the year amounted to PLN 40 million and net profit was PLN 3.6 million.
“With the results for the first half of 2018, we put aside the past and focus on the future. We will show improved results in subsequent periods. The company’s liquidity position is stable. The remaining contracts currently being implemented generate a positive margin, and the projects offered from the second half of 2017 are calculated according to current market prices. – says the President of the Management Board of Erbud SA
Erbud emphasizes that despite worse results, it has increased employment by 307 employees since the beginning of the year. Currently, the company employs almost 2,650 people.