Media commentary

Eurobuild | General contractors in shtuck

20 Dec 2018

Unlike suppliers or property developers, construction companies have limited ability to pass on rising costs to their final customers. When they attempt to do so, the contracts are often cancelled with an estimated 15-20% of construction work orders in 2018 cancelled due to the fact that the bids made came in over-budget.

The 22 construction companies listed on the Warsaw Stock Exchange have made aggregate losses for the fourth straight quarter, according to the "Construction Market in Poland – December 2018" report by Spectis.

Among contractors in Q1-Q3 2018, Budimex stood out with a net profit of nearly PLN 231 mln, compared to PLN 337 mln a year earlier. Unibep, Instal Kraków, Dekpol and Mirbud, whose business operations include both construction services and property development, also reported sustainable earnings. However, overall contractor losses were dominated by the results of Elektrobudowa, PBG, Mostostal Warszawa and Vistal Gdynia. All of these companies have a core business that focuses on civil engineering work commissioned by public authorities.

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