SUMMARY OF 2023 IN THE DEKPOL GROUP: THE HIGHEST NET PROFIT IN A HISTORY IN A STILL CHALLENGING MARKET

The DEKPOL Group, operating in the general contracting, property development, and production of accessories for construction machines, has published its financial results for 2023. The Group’s revenues amounted to PLN 1,568.8 million in the period under review, representing a year-on-year increase of 13%. The Group achieved an EBITDA of PLN 132.1 million (at a comparable level year-on-year; PLN 135.6 million in 2022). The Group ended 2023 with the highest net profit in its history, amounting to PLN 90.4 million, representing a 15% year-on-year increase.

As of the end of 2023, the Group’s cash balance stood at PLN 292.8 million, and the net debt/EBITDA LTM ratio was at a safe level of 0.43.

 

General Contracting segment

The General Contracting segment (GW, DEKPOL Budownictwo) is the largest segment of DEKPOL Group’s business operations, with a revenue share exceeding 68% in 2023. The revenue of the GW segment in the period under review amounted to PLN 1,072.8 million, representing a 7% year-on-year increase, and the operating profit reached PLN 82.8 million, marking a 15% year-on-year growth.

As of December 2023, the company had contracts in its portfolio for external clients with a total contractual value exceeding PLN 1,532 million net. Projects with a total value of approximately PLN 535 million net remained to be completed after reporting period. Additionally, within the GW segment, in-house property development projects with a total value of over PLN 318 million are being implemented, and projects with a value of approximately PLN 94 million remained to be completed after reporting period. Most contracts executed by Dekpol Budownictwo are performed on behalf of private investors. Industrial-logistics projects dominate in the ordering portfolio, accounting for approximately 78% of the entire portfolio by the end of 2023.

 

Property development segment

In 2023, revenues of the property development segment amounted to PLN 320.5 million (20% share in Group’s revenues), and the operating profit reached PLN 71.2 million (corresponding to +74% y/y and +75% y/y, respectively). In financial results of 2023, the Dekpol Group recognized revenues from the property development segment from sales of 478 apartments as well as partial revenue (realized in accordance with construction progress) from implementation of investment in the forward-funding system, with an institutional investor in Wrocław at Braniborska Street (compared to 380 apartments and revenue in line with progress of works in aforementioned project in 2022). Contracting in 2023 (understood as preliminary, real-estate development, and reservation agreements) amounted to 472 apartments compared to 341 apartments in 2022. Thus, operational goals of Dekpol Deweloper set for 2023 were achieved and exceeded. The share of sales of projects with higher prestige and standards was close to 59% in 2023.

As of the end of 2023, Dekpol Deweloper offered 740 apartments for sale. Based on the bank of land held by the company, Dekpol Deweloper will be able to introduce approximately 4,800 apartments, totaling approximately 223,000 m2 of usable floor area (PUM), into the offer.

The goal of the property development segment for 2024 is to sell (based on reservation, real-estate development, and preliminary agreements) 650 apartments and to achieve revenues in the amount of approximately PLN 400 million by handing-over of approximately 500 apartments, together with revenues from implementation of investment at Braniborska Street in Wrocław.

 

Segment of production of accessories for construction machines

 

The segment of production of accessories for construction machines (Dekpol Steel) accounted for nearly 9% of Group’s revenues in 2023. The segment’s revenues in the period under review reached PLN 139.6 million (-11% y/y), and the operating profit amounted to nearly PLN 3 million (compared to PLN 9.8 million in previous year). The year 2023 was for Dekpol Steel and Intek a period of actions related to optimization of portfolio of clients, operational reorganization, as well as efficiency improvement.

 

Commentary of Management Board to results for 2023

The year 2023 was more stable in terms of conducting business activities than previous years, although it was obviously not without its challenges. Naturally, like all entrepreneurs, we faced issues such as cost inflation and high interest rates, but the changes in these areas were not as violent as before. The experiences we gained in the past turbulent years paid off in a relatively calmer, yet still demanding market environment. We proved as an organization that we can leverage the market situation and synergies within the Group to strengthen our position, which translates into achieved financial results.

We are very pleased with results of 2023. Especially the second half of the year turned out to be exceptionally successful in the General Contracting segment as well as in the property development segment. Dekpol Budownictwo is strengthening its position in the industrial-logistics investment market, acquiring new references, and expanding its range of competencies, such as construction of hall systems from prefabricated elements and “design and build” services. The company entered 2024 with a strong ordering backlog and continues to seek contracts that are attractive in terms of both – the margin and further development of team’s competencies.

In the property development segment, our flexible strategy of offering a diverse range enables us to adapt quickly to market changes – an example was the rapid revival in the popular sector following the introduction of the ” Bezpieczny kredyt 2%” program. Additionally, Dekpol Deweloper effectively leverages its strong brand in the premium segment by offering “second home” properties in attractive seaside locations, which are gaining increasing popularity among customers in terms of capital protection or creation of wealth for the future.

Despite market difficulties, position at Dekpol Steel is gradually stabilizing, and the organizational changes being introduced give hope for a return to expected results in this segment in the future. It is also worth to note the steadily growing contribution of prefabrication segment to Group’s business operations. Betpref, the company we have been continuously developing since its acquisition in 2018, is handling an increasing number of orders, and the favorable acquisition of Kombet Plant in Działdowo in 2022 further strengthens our position in this promising area. – says Mariusz Tuchlin, President of Management Board of DEKPOL S.A.

 

Another challenging but rewarding business year is behind us. DEKPOL, as a large but still operationally agile organization, is performing well in the current environment, as evidenced by achieved consolidated financial results: PLN 1.57 billion in revenues, PLN 132.1 million in EBITDA, and PLN 90.4 million in net profit. The satisfying level of margins deserves attention, with double-digit y/y revenue growth for the Group.

Continuous efforts to build and maintain a safe and stable financial position allow us to optimally manage resources and operational activities, consistently pursuing ambitious plans. With this scale of operations, an adequate level of working capital is necessary to execute contracts – we are effective in this area and maintain it at an optimal level, while taking care of secure debt ratios: net debt/EBITDA at the end of 2023 amounted approximately 0.43.

We make every effort to ensure that DEKPOL can pride itself on being a solid, trusted partner, valued by customers, contractors, investors, and financial institutions. Undoubtedly, this reputation, backed by our financial performance, has also contributed to the success of our bonds issuances last year.

Our main priority remains maintaining the safety and financial stability of DEKPOL, which are the foundations for the Group’s further development. This ensures we are prepared for opportunities and market challenges, and any transient changes in economic conditions or market environments affecting any of our three main business segments do not disrupt our medium- and long-term plans or affect our aspirations. Year after year, we attach increasing importance to ESG-related issues as well. While we focus on generating value for shareholders, we do so responsibly, in line with the highest standards. We believe that such a responsible approach to business will play an increasingly important role and yield tangible benefits in the near future. – adds Katarzyna Szymczak-Dampc, Vice President of Management Board, Financial Director of DEKPOL S.A.

 

 

Contact for media:

Katarzyna Sadowska

cc group

katarzyna.sadowska@ccgroup.pl

tel. +48 697-613-020

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Dekpol Capital Group is dynamically developing in construction and property development industry as well as in production of accessories for construction machines. The company was established in 1993. It owns a modern machine park and highly qualified staff. From the beginning of its business activities, it has ambition and determination to further dynamic development with usage of modern technologies. Business activities of the Dekpol Capital Group are based on three main segments. General Contracting services provide the largest share of the Group’s revenues. The offer covers a very wide range of activities. The company has extensive experience in implementation of industrial, logistic, commercial, public, sports and recreational facilities, as well as environmental protection facilities. It also carries out road, sanitary and hydrotechnical works. The company has an established leadership position in Northern Poland and is one of the largest general contracting companies for cubature facilities on a national scale. In turn, Dekpol Steel, the part of the Dekpol Capital Group, is a manufacturer of buckets and accessories for construction machines. It cooperates with the world’s largest manufacturers of construction machinery. The products are sold to Norway, Sweden, Germany, the USA, and Great Britain, and even to Morocco and Australia. The third dynamically developing segment of the Dekpol Capital Group is the property development activity, which, from the beginning of 2019, as a part of Dekpol Deweloper Sp. z o.o. offers flats, apartments, and commercial premises. Since January 2015, the shares of Dekpol S.A. are listed on the Warsaw Stock Exchange.

More information available at: https://dekpol.pl/