Deloitte: Revenues of the 15 largest construction companies increased by 22.5% YoD in 2022
Revenues of the 15 largest construction companies in Poland increased by 22.5% Yof) to almost PLN 44.5 billion in 2022, and in the first half. In 2023, the sales revenues from the WSE of 8 companies from this segment were higher by 1.08% y/y and amounted to PLN 12.3 billion, according to the report "Polish Construction Companies 2023" of Deloitte consulting company. However, the construction market is facing important challenges related to, among others, high prices of materials and energy or lower project supply in selected market segments.
In 2022, the average net result of the 15 largest companies was positive and amounted to PLN 99.4 million, which means a decrease compared to the result for 2021, which amounted to PLN 122.8 million, was reported.
“Public entities remain key investors on the Polish construction market. Their activities, in particular investments in railway and road infrastructure, will be one of the factors affecting the increase in construction and assembly production in the following years. EU funds have a traditionally important role in financing. A significant part of the 76 billion euros that Poland will receive from the budget of cohesion policy in the financial perspective for 2021-2027 will be allocated to further development of road and rail infrastructure," said the partner, the leader of the CE Audit ESG & Construction, Deloitte Lukasz Michorowski.
“Normily half of the construction companies that participated in our study have adopted an ESG strategy or policy defining the priorities of activities in this area. In addition, almost 40% of companies are considering approving such a document in the future. This undoubtedly proves the growing awareness of the industry about the importance of these activities. The construction sector has great potential to introduce positive long-term changes. Thanks to the implementation of the well-thought-out strategy, ESGs will be able to have a positive impact not only on the environment, but also on their employees and customers," he added.
According to the report, in 2022, the revenues of the largest fifteen construction companies reached the level of almost PLN 44.5 billion, which was an increase of 22.5% y/y. The leader of the ranking, as in previous years, was the Budimex Group, whose revenues amounted to PLN 8.6 billion, which means an increase of 8.9% y/y. In second place was the Strabag Group with revenues of PLN 5.1 billion (revenues at the level similar to 2021). The third place was taken by the PORR Group, realizing revenues of PLN 3.9 billion (increase by 12% y/y). Noteworthy are the companies that achieved the highest value increase in revenues in 2022: Grupa Polimex - Mostostal (increase by PLN 1.5 billion) and the new Atlas Ward Polska company (PLN 837 million more).
The authors of the report indicated that Budimex could also boast the highest sales result, which amounted to PLN 872 million. With a clearly lower indication, the second one in the ranking is the Poznań Construction Corporation Pekabex (PLN (PLN 281 million). The largest nominal increase in 2022 was recorded by the Goldbeck Group (improving the result by PLN 131 million), while Atlas Ward Polska gained the most in percentage (improving the result by PLN 126 million - over 206%). The average operating margin of the fifteen largest companies increased by PLN 12 million (6.5% y/y).
Of the companies presented in the ranking, seven suffered a loss - the largest of which was recorded by the Trakcja PRKiI Group in the amount of 2585%. The Budimex Group, occupying the leading position for the sixth year in a row, showed a net result exceeding PLN 548 million (a fall of 44.4% y/y). The second position in the ranking was achieved by the Strabag Group with PLN 199 million (an increase of 80.1%). The last place on the podium was the Goldbeck Group, which obtained the result of PLN 184.6 million, which is a 2.16.4% increase compared to the previous year, amounting to PLN 126.2 million in nominal terms.
According to the Deloitte report, construction and assembly production, measured in current prices, in 2022 in Poland increased by 20.5% y/y. At constant prices, this increase was almost 9%. In this period, construction companies made investments worth PLN 291.8 billion (at PLN 242.1 billion in 2021). The implementation of infrastructure investments financed from grants under EU funds, as in previous years, had a significant impact on this increase in value.
The report also shows that 2022 was particularly difficult for the housing market, due to the limited demand resulting, among others, from rising interest rates and tightening the criteria for calculating creditworthiness for housing loans. In addition, the activities of developers were also affected by the unfavorable macroeconomic environment in the form of persistent high inflation, which contributed to the increase in the costs of running a business. In 2022, the primary market in the six largest cities in Poland saw a decrease in the number of apartments sold by nearly 50% compared to 2021.
Last year, the structure of the construction market decreased slightly compared to 2021. The largest part of the market - 31.8% - was non-residential buildings (in 2021, the second largest segment of the construction and assembly market). In second and third place in terms of market size were transport infrastructure (28.8%) and residential buildings (17.5%). The remainder were pipelines, telecommunications and power lines, industrial structures and other civil engineering facilities, and were also given.
“According to the historic trend, the main growth factor for construction production in 2022 was the civil engineering sector, which saw a year-on-year increase of 22.5%. The construction works sector related to the construction of buildings and the sector of specialized construction works recorded an annual comparable increase of 19.9% and 19.8%, respectively. It is likely that Maciej Niemierek, the high level of inflation, has had a significant impact on this situation," said Deputy Director in the Financial Advisory Department, Deloitte.
Despite the difficult conditions caused by the slowdown in the construction market, the mood begins to slightly improve. According to a survey conducted by Deloitte, 50% of respondents predict a slight increase in the economic situation over the next 6-24 months. In comparison, in last year’s survey, 10% of respondents showed sensitive optimism towards the coming months. Three areas will have the greatest impact on the activities of companies in the coming years according to the respondents: the availability of employees (indicating 59% of respondents), the increase in the prices of materials (57%) or problems with subcontractors (37%). It is worth noting that in last year’s survey, 79% of respondents also indicated an increase in the price of materials as one of the factors, 17% pointed to problems with employee availability, and 31% pointed to problems with subcontractors.
The survey as part of the preparation of the report was carried out among several entities from the construction industry. 46% of respondents are large and very large enterprises, which in 2021 achieved revenues in the range from PLN 500 million to PLN 999 million and over PLN 1 billion or more. 54% of respondents are small and very small enterprises, which in 2022 achieved revenues less than PLN 100 million and in the range of PLN 100 million - PLN 500 million.
Source: Deloitte and ISBnews