Summary of the year 2020 in the Dekpol Group: record results despite demanding environment

The DEKPOL Group, operating in the areas of general contracting services, real-estate development activities and production of buckets and accessories for construction machines, published its financial results for 2020. In the discussed period, Group’s revenues increased by 36.6% y/y and amounted to PLN 1,05 billion. Gross profitability on sales improved by 2,2 pp. y/y to 13%, which resulted in an increase in gross profit on sales up to PLN 137,4 million (+ 65% y/y). On the reporting basis, the Group’s operating profit increased in 2020 by 14% y/y up to PLN 81 million, and after adjustment for one-off events, which took place in 2019, dynamics of operating profit amounted to 87,7% y/y. The Group ended the year 2020 with a net profit of PLN 52,8 million, which means an increase by 4% y/y on the reporting basis and as much as 86% y/y on the consolidated basis.
In 2020, the Group’s cash flows from operating activities amounted to PLN +82,8 million. At the end of the year 2020, the cash balance amounted to PLN 157,5 million, while net debt/EBITDA ratio was at the level of 1,15.

Real-estate development segment

In 2020, sales revenues of the real-estate development segment increased by 85% y/y up to PLN 286,6 million (27% of share in Group’s revenues), and the operating result amounted to PLN 41,5 million (compared to PLN 12,7 million in the previous year). In the discussed period, the Group recognized sales of 622 apartments. Sales revenues recognized in 2020 were affected by handovers for use of prestigious investments on Wyspa Spichrzów (Granary Island) in Gdańsk, i.e. Grano Residence, Grano Hotel Residence as well as popular housing estates: Nowe Rokitki V, Nowe Rokitki VI, Osiedle Zielone III, building no. IV, Młoda Morena Park II and Foresta Estate. Successful implementation of the project Grano Residence confirms adequacy of the strategy adopted by the DEKPOL Group, consisting in implementation of real-estate development projects in both the premium and popular segments. In 2020, sales share of projects of a higher prestige and standard addressed to more demanding customers amounted to 39%. The average value of apartments offered increased by over 5% y/y.
At the end of 2020, in the Group’s sales offer remained 238 apartments. The owned bank of land allows the Group to introduce approximately 5 thousand of apartments in total for over 220 thousand of sqm of PUM (Usable Floor Area).

General contracting segment

General contracting segment (GW), separated as of 1st of January 2021 to Dekpol Budownictwo, remains the largest segment of the DEKPOL Group’s operations, with a revenue share of 62% in 2020. The Group has an established position on the market and a high level of reference, thanks to which cooperates with leaders of dynamically growing market of warehouse spaces. In the discussed period, sales revenues of GW segment amounted to PLN 654,5 million, which means an increase by 34% y/y, and operating profit increased by 51,5% y/y up to PLN 45,3 million, which is the effect of implementation of the strategy consisting in increase of the value of services provided. At the end of 2020, the Group executed contracts for external entities with contractual value of over net PLN 900 million in total. After reporting period, for implementation awaited projects with the value of over net PLN 338 million in total, of which the vast majority of works will be carried out in 2021. Additionally, as a part of GW segment, the Group will carry out in 2020 intra-group real-estate development projects with the value of net PLN 70 million in total. In the discussed period, the most important projects implemented in GW segment include, in particular: construction of a production and warehouse plant with office facilities for Iglotex S.A., construction of a warehouse and production center with social and office facilities for Tricity North Sp. o.o. or construction of a warehouse, production and office facility with social and office spaces for 7R S.A., as well as construction of a bicycle factory with a high-storage warehouse for RTE Poland. At the end of 2020, participation of industrial and logistics projects in the entire portfolio of GW’s orders amounted to approximately 80%.

Segment of production of accessories for construction machines

In 2020, the segment of production of accessories for construction machines was responsible for 7,6% of DEKPOL Group’s revenues. In the reported period, its revenues amounted up to PLN 80,6 million, and the operating profit up to PLN 5,8 million. In Q2 and Q3 last year, this segment was especially affected by effects of the coronavirus pandemic, in particular in the OEM area. Continuity of production was maintained through the orders obtained from new customers – and as a result, the Dekpol Steel brand has become more recognizable among new, end customers, including the most important mines in the world. In the third quarter of last year, Dekpol Steel has started business talks with the world’s largest manufacturer of construction machines, the purpose of which is to locate production at the plant within the Dekpol Group. Therefore, Dekpol Steel began implementation of processes and requirements of a new recipient as well as preparation of documentation necessary for expansion of production plant. Lockdown period was additionally used for further optimization and automatization of production processes as well as recruitment and training of production employees.
Observation of the current dynamic increase in orders allows to aim, that Dekpol Steel will increase the value of turnover in 2021 by as much as 42% compared to 2020. In turn in the perspective of 2022, the Company will be able to execute orders, achieving annual revenues of up to PLN 150 million. It is a limit amount of income which does not require performance of new investments. Additionally, in order to execute expected increased number of orders, in the third quarter of 2021 the Company plans to begin of expansion of production spaces.

Commentary of Management Board in respect of results of the year 2020 and perspectives for another quarters

Regardless of the coronavirus pandemic, which led to many changes in the global economy, the past year was a successful year for the Capital Group in terms of business operations and a record-breaking year in terms of financial results. This is a significant confirmation that the strategic direction we have chosen is right. It is based on sustainable development based on three complementary pillars of our business: General Contracting segment (Dekpol Budownictwo), Real-estate Development (Dekpol Deweloper) and Production of accessories for construction machines (Dekpol Steel). Dekpol Budownictwo has an established, high market position and very good references, which is appreciated by both new clients as well as contractors with whom the Company has already cooperated. The company makes good use of good economic situation in the construction and assembly sector, supported by dynamic development of e-commerce sector, which declares demand for modern warehouse and logistics spaces in order to achieve its business goals. The company’s goal is still a stable and considerate development in this market segment. – says Mariusz Tuchlin, President of Management Board of DEKPOL S.A.

Last year, the Company Dekpol Deweloper implemented projects including construction of housing estates, luxury apartment buildings as well as a condo hotel. In line with adopted strategy, the Company carries out investments meeting various needs of customers, including achieves experience and recognition in the segment of apartments investments, characterized by high margins. Coronavirus pandemic forced the Company to verify some of its goals concerning sales and launch of new investments due to extended administrative procedures. On the other hand, we were actively looking for new business opportunities, which resulted in signing a preliminary sales agreement (after balance sheet date) of the Braniborska project to an institutional investor. This is one of the first such transactions on the growing PRS market in Poland and we do not rule out that more will be concluded in the future. Due to the constant increase in the demand for flats, the aim of the Company is to achieve further increase in sales of flats. – adds Mariusz Tuchlin, President of Management Board of DEKPOL S.A.

Among the three business segments of the Group, the activities of Dekpol Steel in 2020 were significantly affected by effects of the pandemic. However, I am convinced that Dekpol Steel, thanks to experience, effective planning and determination of the team, made very good use of this difficult time. In addition to maintenance of production continuity, the Company made investments in its automation and robotization, as well as strengthen its human resources. Taking into account the above investments, as well as the fact, that in the fourth quarter and in 2021 we observed a sustained rebound in the number of orders placed, we expect further development of Dekpol Steel in the following quarters. The company emphasizes importance of robotics development, employment as well as sales channels, which allow for increase of sales and improvement of results.
It is worth to mention, that at the beginning of 2021 we accomplished the processes of separation of individual business segments into separate companies. Dekpol S.A. now serves as the managing holding company of the Capital Group. Reorganization activities carried out are aimed at adjustment of structures and resources to increasing scale of business operations of individual segments and the entire Group. We assume that this will lead to a systematic improvement in efficiency and financial results.
– summarizes Mariusz Tuchlin, President of Management Board of DEKPOL S.A.

We perform a lot of work in order to ensure, that financial position of the DEKPOL Group remains optimal, stable and safe. It is extremely important due to both, demanding and dynamically changing business environment as well as DEKPOL’s plans in the range of systematic increase of a scale of business operations. We maintain a balanced cash position – at the end of the year, cash position was maintained at the level of PLN 157,5 million, while net debt to EBITDA ratio was at the level of 1,15 only. Our achievements in this field are noticed by investors, which resulted in implementation of bond issues with significant oversubscription. At the same time, after balance sheet date, DEKPOL performed successful issues of bonds. As a result, now the vast majority of our financial liabilities mature in over 3 years. – 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
phone. +48 697-613-020