Summary of 1-3Q 2023 in the Dekpol Group: Positive dynamics of revenues and net profit thanks to a strong third quarter

The DEKPOL Group,

operating in the areas of general contracting, property-development, and the production of buckets and accessories for construction machines, has published financial results for 1-3Q 2023. The Group’s revenues for the discussed period amounted to PLN 1,065.7 million, showing a year-on-year increase of 6.8%. The Group achieved an EBITDA of PLN 89.5 million (at a comparable level year-on-year). For the first 9 months of 2023, the Group concluded with a net profit in the amount of PLN 58.7 million, representing a 20% year-on-year growth.

In 1Q only, the Group achieved PLN 496.1 million in revenues, indicating a growth of 36.8% year-on-year. EBITDA increased by 9.2% year-on-year during this period, reaching PLN 42.3 million, and the net profit rose by 43.84% year-on-year to PLN 32.4 million.

As of the end of September 2023, the Group’s cash position amounted to PLN 309.7 million, and the net debt/EBITDA LTM ratio stood at a safe level of 0.62.

General contracting segment

General Contracting segment (GW, DEKPOL Budownictwo) is the largest segment of DEKPOL Group’s business activities, accounting for nearly 67% of revenues in 1-3Q 2023. The revenues of the GW segment during this period amounted to PLN 713.2 million, showing a 6% year-on-year decrease, while the operating profit was PLN 56.9 million, representing an increase of over 9% year-on-year. The third quarter of 2023 itself was a very good quarter in terms of both revenues and the performance of the GW segment.

As of the end of September 2023, the company had contracts in its portfolio for external entities with a total contractual value exceeding PLN 1,538 million net. After reporting period remain to be performed projects of a total value of approx. net PLN 824 million. Additionally, within the GW segment, in-house real-estate development projects with a total value of over PLN 429 million are being carried out, and projects with a value of approximately PLN 134 million are yet to be implemented after reporting period. Most contracts undertaken by Dekpol Budownictwo are performed on behalf of private investors, with an average value of nearly PLN 70 million.

Industrial-logistic projects dominate the ordering portfolio, constituting approximately 77% of the entire ordering portfolio as of the end of September 2023.

Property development segment

In 1-3Q 2023, the revenues of the property-development segment amounted to PLN 208.1 million (19.5% share in the Group’s revenues), with an operating profit of PLN 43.4 million (almost a threefold increase in revenues and over a 4.5-fold increase in operating profit year-on-year). In financial results for 1-3Q 2023, the Dekpol Group, from the activities of the property-development segment, recognized revenues from the sales of 329 residential units and partial revenue (recognized in accordance with the progress of construction) from the implementation of the investment with an institutional investor in Wrocław on Braniborska Street (compared to 122 units and revenue in line with the progress of work in the same project in 1-3Q 2022).

Contracting in 1-3Q 2023 (as defined by preliminary, real-estate development, and reservation agreements) amounted to 359 units compared to 262 units in 1-3Q 2022. As of the end of September 2023, Dekpol Deweloper had 649 units available for sale. The company assesses the market situation and prospects positively and maintains the goal of achieving PLN 308 million in revenues in 2023.

 

Segment of production of accessories for construction machines

In 1-3Q 2023, the segment of production of accessories for construction machines (Dekpol Steel) accounted for nearly 11% of the Group’s revenues. The segment’s revenues during this period reached PLN 112.5 million (a decrease of -9% year-on-year), with an operating profit of PLN 3.7 million (compared to PLN 10 million the previous year). The three quarters of 2023 were a period for Dekpol Steel and Intek to further strengthen their position in new production areas and to undertake initiatives aimed at improving the efficiency of their existing production profile.

Commentary of Management Board with regards to results for 1-3Q 2023

We are pleased with results achieved by the Group in the period 1-3Q 2023. The third quarter of the current year deserves special attention – being the strongest in terms of sales and results in the General Contracting segment and also very strong in the property-development segment. Dekpol Budownictwo consistently strengthens its market position in the industrial-logistics investment segment, gaining references in new executive areas and actively developing added values, such as the system of constructing halls from prefabricated elements and the “design and build” services.

Dekpol Deweloper is implementing its strategy of having a diversified offering, allowing for flexible responses to changes in the market – including the rapid return of customers purchasing properties on credit, thanks to the launch of the ” Bezpieczny kredyt 2%” Programme.

 Consistently, the premium segment remains highly popular, as reflected in the contracting levels, especially for properties acquired for investment purposes. It’s worth to mention that the recently launched Grano Hotel Solmarina has gained significant recognition from customers. Dekpol Steel continues to face challenges in a difficult market, but the situation in this segment is gradually stabilizing, and the changes we are implementing in the company allow us to anticipate a return to expected results in the medium term. I would also like to draw attention to our prefabrication business, which is increasing in scale quarter by quarter.

In summary, thanks to strategic of business diversification, leveraging synergies within the Group, a strong financial position, as well as the high competence of the team, even in a demanding and diverse market, DEKPOL is achieving its goals and reaching satisfactory financial results. – says Mariusz Tuchlin, President of Management Board of DEKPOL S.A.

 

In recent years, DEKPOL has made a name for itself as a reliable partner, both for clients and other stakeholders, including investors and financial institutions who appreciate operational stability and consistent implementation of the Group’s business plans. This is reflected in the successes of our Bonds Issue Programs, which significantly contribute to development of DEKPOL even in a challenging environment. In the reporting period, we commenced implementation of the second Bonds Issue Programme, from which the Group has raised 70 million PLN so far. We consistently ensure that DEKPOL’s financial situation is secure and stable, as it serves as an essential foundation for further strengthening the Group’s market position in various business segments, especially considering increasing scale of our business from year to year. – 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/