Summary of 2022 in the DEKPOL GROUP: Very good results yhanks to diversified business activities and strong market position

Dekpol Group, operating in the areas of general contracting, property development, and manufacture of buckets and construction accessories, has published its financial results for the year 2022. The Group’s revenues for the period amounted to PLN 1,387 million, representing a y/y increase of 10%. The Group achieved an EBITDA of almost PLN 136 million, which is 9% higher y/y. The Group ended 2022 with a net profit of PLN 79 million, representing an increase of 4% y/y.

At the end of 2022, the Group’s cash position amounted to PLN 229.5 million, and the net debt/EBITDA LTM ratio was at a safe level of 0.72.

 

General Contracting Segment

The General Contracting segment (GW, DEKPOL Budownictwo) is the largest segment of the Dekpol Group, with a revenue share of over 72% in 2022. The revenues of the GW segment in the period exceeded PLN 1.0 billion, representing an 18% y/y increase, and the operating profit was at the level of PLN 71.6 million (+44% y/y).

At the end of 2022, the company had contracts for external entities in its portfolio with a total contractual value of over PLN 1.315 billion net. Projects with a total value of approximately PLN 454 million net remained to be implemented after the reporting period. Additionally, within the GW segment, there are internal real-estate development projects with a total value of PLN 420 million, and projects worth approximately PLN 139 million remained to be implemented after the reporting period. Most contracts of Dekpol Budownictwo are carried out on behalf of private investors and have an average value of PLN 70 million.

Industrial-logistics projects have the dominant share in the ordering portfolio – at the end of 2022, their share in the entire ordering portfolio amounted approximately 89%.

 

Property Development Segment

In 2022, the revenues of the property development segment amounted to PLN 183.8 million (13% share in the Group’s revenues), and the operating profit amounted to PLN 40.8 million (compared to PLN 253.9 million and PLN 49.3 million in 2021, respectively). In financial year of 2022, the Dekpol Group recognized 380 apartments and partial revenue (realized in accordance with the progress of construction works) from a contract with an institutional entity. At the same time, in the previous year, 406 apartments were recognized in the property development segment’s revenues. Contracting in 2022 (in terms of preliminary, real-estate development, and reservation agreements) amounted to 341 units compared to 490 units in 2021.

As of the end of 2022, Dekpol Deweloper had 667 units available for sale. The company positively assesses the market situation and prospects, as well as maintains its goal of achieving PLN 308 million in revenues in 2023.

 

Segment of manufacture of accessories for construction machines

The segment of production of accessories for construction machines (Dekpol Steel) accounted for over 11% of the Group’s revenues in 2022. Dekpol Steel’s revenues in the period reached a high level of PLN 157.4 million (+31%), while the operating profit amounted to PLN 9.8 million (-20% y/y). The outbreak of the war in Ukraine caused fluctuations in steel prices and a verification of the purchasing plans of the main customers. As a result, after a good first half in terms of revenues, when orders acquired in late 2021 were still being executed, the second half of 2022 saw a decline in turnover to levels observed during the pandemic. To diversify and mitigate risks, the plants started producing for customers in the prospective offshore, green energy, and other steel construction segments, as well as initiating a procedure to obtain licenses required for suppliers in the defense segment, including NATO.

 

Management Board’s commentary on 2022 results

The year 2022 was another test for us, which confirmed that diversification of business activities within DEKPOL and a strategy based on development in three main complementary segments and the growing area of prefabrication (Betpref) brings results and allows to offset unfavorable trends within the Group. Our revenues increased by 10% and exceeded PLN 1.38 billion, while net profit increased by 4% to PLN 78.9 million – we have achieved very good results in the history of the Group, despite a very demanding environment. The General Contracting segment (Dekpol Budownictwo) achieved very good results for another year in a row, exceeding PLN 1 billion in revenues. Concentration on short-term contracts and continuous improvement in the area of offering enabled us to maintain margins at a satisfactory level despite dynamically growing prices of materials and services. In these turbulent times on the market, one of the key elements for our success turned out to be the availability of materials.

As a result, our own production of concrete and steel prefabricates significantly contributed to the successful implementation of contracts in 2022. The Betpref company, which we have been developing and equipping with new technological lines since its acquisition in 2018, focused on fulfilling orders for external construction companies in 2022. Additionally, seeing the prospects and development of the prefabrication market, we acquired the plant of the company Kombet in Działdowo in summer of 2022. Our intention is to further develop in the prefabrication area, as we see great potential in it.

The contribution of Dekpol Deweloper to the Group’s results was lower in 2022 due to the specific schedule of transfers for individual projects. Due to the limitation of the credit action, the level of newly concluded contracts was lower than planned at the beginning of 2022, but historically high participation of “cash” customers and a wide, diversified offer allow the company to achieve satisfactory sales levels with good margins.

In turn, Dekpol Steel had another good year in terms of revenues; thanks to the acquisition of the Intek plant in Lubawa in 2021, we increased our production capacity and in the first half of the year, we achieved very good volumes of production and sales. However, the outbreak of war in Ukraine led to a weakening of demand in the segment of buckets and accessories, which, combined with rising costs, was reflected in results. Thanks to the decisive and quick decisions of the Management Board, both, Dekpol Steel and Intek started production for customers in promising offshore, green energy, and other steel structures segments, as well as the procedure for obtaining licenses required for defense suppliers, including NATO. We assume that this temporarily difficult time may pay off in the future.

To sum up the past year, it should be emphasized that as a Group, we can flexibly approach challenges and continue to develop in demanding times. Consistently, despite difficult environment, we strengthen our foundations, invest in team development and human capital, as well as seek business opportunities, which constantly strengthens our position in the market. – says Mariusz Tuchlin, CEO of DEKPOL S.A.

The year 2022 has demonstrated that as a Group, we are well-prepared for various scenarios and, thanks to diversification, we are recording solid financial results despite a challenging environment. Once again, it has been confirmed that a cautious approach to financing activities and a conservative capital strategy can guarantee security during times of significant uncertainty or market slowdown. We are focused on providing optimal growth conditions for our main businesses in order to enable the best possible utilization of market opportunities. In recent years, investments have contributed to the dynamic growth of the Capital Group. A significant investment in a higher level of working capital has been crucial in achieving a new level of Group revenues, which have already reached almost PLN 1.4 billion.

The availability of financing for M&A transactions, which are a part of our strategy, is of no lesser importance to the development of the Group. At the same time, we pay attention to a safe level of debt – so important especially in an inflationary environment and with high interest rates. We continuously analyze and plan the financing sphere of the Group’s business activities, using tools allowing mitigation of potential risks. Importantly, we do not lose sight of ESG issues in our daily work. Matters related to non-financial reporting have always been and will continue to be one of the main priorities in business operation of the Dekpol Group. In 2022, we established a team focused on creation of an ESG strategy for the Group. As a part of the team’s work, we conducted analysis of our processes and implemented pro-environmental and pro-social actions, including interactions with our stakeholders. We aim to implement the ESG strategy in 2023. Our priority remains increasing of value for shareholders, but done in a responsible manner, in accordance with the highest standards. – adds Katarzyna Szymczak-Dampc, Vice President of Management Board, CFO 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/