Summary of H1 2024 in the Dekpol Group: Very good half-year despite an increasingly challenging market situation

The DEKPOL Group, operating in the areas of general contracting, property development, and the production of buckets and accessories for construction machines, has published its financial results for the first half of 2024. The Group’s revenues amounted to PLN 687.3 million during the period, representing a year-on-year increase of nearly 21%. The Group achieved EBITDA in the amount of PLN 57.2 million, marking a 20% year-on-year growth. The Group concluded the first half of 2024 with a net profit of PLN 43.1 million, which reflects a 65% year-on-year increase.

At the end of June 2024, the Group’s cash balance amounted to PLN 426.7 million, and the net debt/EBITDA LTM ratio was at a safe level of 0.54.

 

General Contracting segment

The general contracting segment (GW, DEKPOL Budownictwo) is the largest business segment of the DEKPOL Group, contributing over 74% of revenues in the first half of 2024. The segment’s revenues during this period amounted to PLN 509.3 million, representing a year-on-year increase of 38%, while operating profit reached PLN 26.6 million, marking a 5% year-on-year growth.

As of the end of June 2024, the company had external contracts in its portfolio with a total contractual value exceeding PLN 1,171 million net. Projects worth approximately PLN 657 million net remained to be executed after reporting period. Additionally, the GW segment includes internal group property development projects with a total value of over PLN 288 million, with projects worth approximately PLN 182 million remaining for execution after reporting period.

The majority of DEKPOL Budownictwo’s contracts are carried out on behalf of private investors. Industrial and logistics projects dominate the ordering portfolio, accounting for approximately 91% of the entire portfolio at the end of June 2024.

 

Property development segment

In the first half of 2024, the revenues from the property development segment amounted to PLN 95.9 million (accounting for over 14% of the Group’s revenues), and the operating result reached the level of PLN 27.1 million (respectively -7% year-on-year and +30% year-on-year). In financial results for the first half of this year, the Dekpol Group recognized in its revenues sales of 168 apartments from the property development segment, as well as partial revenue (recognized in line with the progress of construction works) from the PRS investment (in a forward-funding system) with an institutional entity in Wrocław on Braniborska Street (compared to 181 apartments and revenue in line with progress in the same project in the first half of 2023).

Contracting in the first half of 2024 (in terms of preliminary, real-estate development, and reservation agreements) amounted to 236 apartments, compared to 198 apartments in the first half of 2023. As of the end of June 2024, there were 950 apartments available for sale in the offer of Dekpol Deweloper.

 

Segment of production of buckets and accessories for construction machines

The segment of production of buckets and accessories for construction machines (Dekpol Steel) accounted for nearly 9% of the Group’s revenues in the first half of 2024. The segment’s revenues during this period amounted to PLN 60.1 million (compared to PLN 76.7 million in previous year), while the operating profit reached PLN 7 million (compared to PLN 3.5 million in previous year). Both, Dekpol Steel and Intek continue their efforts to improve efficiency, which is reflected in the improvement of the operating result.

 

Commentary of Management Board to results in H1 2024

We are satisfied with results the DEKPOL Group achieved in the first half of this year – mainly due to a very strong start to the year, as we are already seeing the first signs of a market slowdown in the second quarter. However, when compared to the general market situation, it is important to emphasize that we are performing very well operationally, and the strategic actions and initiatives taken by the team in recent years are paying off, resulting in a satisfactory level of margins despite challenging macroeconomic environment in which we all operate.

The General Contracting segment had an excellent half-year, contributing 74% of the Group’s revenues. This is largely the result of a strong pipeline of contracts secured in recent months. As of the end of June, the Dekpol Budownictwo ordering portfolio exceeded PLN 1.17 billion, which is crucial for achieving of satisfactory results for the entire year – especially given the current slowdown in contract signings observed in the market. In line with its adopted strategy, the company focuses on execution of projects ensuring an appropriate level of profitability and is continuously expanding its competencies in the field of cubature construction.

The property development segment made a noticeable contribution to the Group’s results in the first half of this year, driven by recognition of high-margin projects. Dekpol Deweloper has an attractive and diverse offering to a broad spectrum of customers and maintains its strong market position. A strong brand, portfolio, and an attractive bank of land are crucial, especially as the market becomes increasingly demanding.

The construction equipment market, in which Dekpol Steel operates, remains very challenging, but the team continues to seek new markets and contracts that will allow to utilize potential of our plants. In contrast, in the offshore, transportation, and heavy industry sectors, where Intek operates, we expect a good second half of the year in terms of contracts. It’s also worth to mention, that throughout the entire equipment manufacturing segment, we are seeing results of efforts focused on optimization and improvement of our production efficiency.

The results achieved and the strong financial backing allowed us to share profits with our shareholders. In May, the dividend payout from the profit for the year 2023 was approved, amounting to PLN 19.99 million, or PLN 2.39 per share, which will be paid out in October this year. – says Mariusz Tuchlin, CEO of DEKPOL S.A.

 

In financial team of the company DEKPOL, we are constantly working to ensure that the Group has strong foundations for growth during periods of good market conditions, as well as equally strong backing when the market we operate in becomes more demanding. We actively seek out and utilize available tools to ensure that the financing structure is best suited to the needs and scale of the Group’s business operations and that it is as optimal as possible in terms of current costs of raising and servicing capital.

In June, we conducted the largest bond issuance in the Group’s history, and one of the largest on the Polish capital market in the first half of the year. From this offering of green bonds (Green Bonds), we raised PLN 225 million. It’s worth to note, that among the investors who placed their trust in us (so many that the reduction rate was 34%) was the European Bank for Reconstruction and Development (EBRD), which invested PLN 43 million in DEKPOL’s bonds. Thanks to favorable financing terms, we strengthened foundations and competitive position of the Group, placing particular emphasis on key areas of sustainable development and decarbonization, as some part of funds from the issuance will be allocated to projects in these areas. – 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/