SUMMARY OF 1-3Q 2024 IN THE DEKPOL GROUP: SATISFACTORY RESULTS IN A DEMANDING MARKET

DEKPOL Group operating in the areas of general contracting, property development and production of buckets and accessories for construction machines, has published its financial results for Q1-3 2024. The Group’s revenue amounted to PLN 975.4 million in the period, 9% less on a y/y basis. The Group’s EBITDA amounted to PLN 87.6 million, and was comparable y/y. The Group ended the nine months of 2024 with a net profit in the amount of PLN 60.4 million, 3.1% more on a y/y basis. As of the end of September 2024, the Group’s cash balance amounted to PLN 274.8 million, and the Group’s LTM net debt/EBITDA ratio was at a safe level of 1.55.

General contracting segment

The general contracting segment (GW, DEKPOL Budownictwo) is the largest business segment of the DEKPOL Group, with its revenue share reaching over 74% in Q1-3 2024. Revenues of the GW segment in the period under review amounted to PLN 725.7 million, at a similar y/y level. Operating profit amounted to PLN 36.3 million, which, however, compared to the segment’s record profits in 2H 2023, translated into a 36% y/y decline in earnings.

At the end of September 2024, the company had a portfolio of contracts for third parties with a total contractual value of over PLN 1,285 million net. Projects with a total net value of approximately PLN 594 million remained to be executed after reporting period. In addition, within the GW segment, there are intra-group property development projects with a total value of over PLN 337 million, and projects with a value of about PLN 193 million remained to be executed after reporting period. Most contracts of Dekpol Budownictwo are carried out on behalf of private investors. Industrial and logistics projects have a dominant share in the ordering portfolio – at the end of September 2024, their share in the ordering portfolio reached about 84% in total.

 

Property development segment

In Q1-3 2024, sales revenues of the property development segment amounted to PLN 120 million (more than 12% share of the Group’s revenues), and the operating result amounted to PLN 38.3 million (-42% y/y and -12% y/y, respectively). In financial result for 1-3Q this year, the Dekpol Group, from business activities of the property development segment, recognized in financial result sales of 196 apartments as well as partial revenue (gained in accordance with the progress of site works) from the implementation of the PRS project (forward-funding), with an institutional entity in Wrocław at Braniborska Street (vs. 342 apartments and revenue in accordance with the progress of work in the aforementioned project in 1H 2023). Contracting in 1-3Q 2024 (in terms of preliminary, real-estate development and reservation agreements) amounted to 374 apartments compared to 359 apartments in 1-3Q 2023.

As of the end of September 2024, Dekpol Deweloper had 1006 apartments available in its sales offer.

Management Board of DEKPOL assumes that the Group’s property development segment will generate about PLN 250 million in revenue this year, which will consist of recognition in financial result of sales of about 340 apartments, as well as revenues from the execution of investment in Wrocław at Braniborska Street. Current target of Dekpol Deweloper (based on reservation, real-estate development and preliminary agreements) assumes sales of 550 apartments.

 

 

Segment of production of buckets and accessories for construction machines

The segment of production of buckets and accessories for construction machines (Dekpol Steel) was responsible for more than 9% of Group’s revenues in Q1-3 2024. Segment revenues in the period reached PLN 91.3 million (-19% y/y), while operating profit amounted to PLN 10 million (vs. PLN 3.7 million a year ago). Dekpol Steel and Intek are continuing their efficiency improvement activities. Management Board assumes stable development of the company aimed primarily at consistent achievement of profitability, which in long term perspective is expected to lead to a return to a growth path.

 

Commentary of Management Board to results for 1-3Q 2024

The Group’s financial results for the nine months of this year – satisfactory from our point of view, given the market circumstances – reflect the validity of our strategy to diversify our business operations. Basing DEKPOL’s business on three main pillars allows us to grow stably and maintain a secure financial position even at a time when the economy is clearly slowing down. Selective approach to ongoing projects, attention to their economics and constant analysis of the market for business opportunities make DEKPOL’s market position strong, which is appreciated by our contractors and customers. We estimate that with our current ordering portfolio in the GW segment, pipeline of real-estate development projects and new orders gained by Dekpol Steel, we are well prepared for any market circumstances – both for a possible further downturn and a rapid return of the market to a path of dynamic growth.

In addition, our performance and strong financial background allowed us to share our profit with Shareholders: in October, we paid out PLN 19.99 million, or PLN 2.39 per share, in the form of a dividend – says Mariusz Tuchlin, President of Management Board of DEKPOL S.A.

 

We have always emphasized, how important for the development of the DEKPOL Group remain strong finances. Taking care to ensure that the Group has a solid foundation to carry out its operational tasks, is particularly important during weaker economic times, and at the same time allows us to be ready for the return of more favorable market conditions. We are constantly seeking and using available tools to ensure that financing structure is precisely matched to the needs and scale of the Group’s business operations in the given and anticipated macroeconomic situation in upcoming quarters. We also make it a priority to optimize the cost of raising and servicing capital, which allows us to operate effectively in all circumstances. Financial institutions appreciate consistent implementation of DEKPOL’s strategy, our plans and achievements to date, thanks to which we receive attractive external financing to achieve our business goals – 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

cellphone: +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/