The year 2016 was challenging for the entire construction sector due to the lower number of tender procedures than expected - in particular in public contracts. Whereas, it must be stressed, that compared to 2015 Mostostal Warszawa Group increased the value of concluded contracts by 44%. In 2016 Mostostal Warszawa Group was awarded new contracts amounting to PLN 0,6 billion.

In spite of the decline in the construction output, Mostostal Warszawa Group continued a tendency of positive financial results initiated in 2014 and ended the year with profit amounting to PLN 41 million gross. In 2016 the Group noted PLN 15 million net profit from continuing operations in which one-off event was included - write-off for the part of the deferred tax asset in the amount of PLN 12 million. This one-off event consequently contributed to decreasing net income by the same amount. We achieved consolidated sales revenue in the amount of PLN 1.403 million which comparing to 2015 increased by 10%.

As at 31 December 2016 Mostostal Warszawa Group had PLN 216 million in cash and cash equivalents.  Financial debt, taking into account leasing, bank loans and corporate debt relative to Acciona Construcción S.A., amounted to PLN 221 million.

We have a very favourable profile of financial debt, since bank loans and leasing amount only to PLN 17 million of PLN 221 million (9 million PLN as at 31 December 2015). Also, in comparison with December 2015, we have reduced our corporate debt to Acciona Construcción S.A. by EUR 3 million and now it amounts to PLN 204 million. As of today, the terms of repayment of our loans have been extended. In addition, it will allow us to use effectively as an additional source of financing Mostostal Warszawa’s development. Due to the high balance of the loans denominated in euro the Mostostal Group is exposed to the impact of foreign exchange differences in this respect. The value of negative foreign exchange recognised in profit amounted to PLN 7 million in 2016.

As at 31 December 2016 net equity of the Mostostal Warszawa Group amounted to PLN 238 million (increase of 6% compared to the status at 31 December 2015), while employment has reached the status of 1,497 employees and was lower by 23 people compared to the state of the day of 31 December 2015.

Mostostal Warszawa Group's order backlog amounted to PLN 1,4 billion at the end of December 2016. The biggest part constituted contracts in the energy sector. Mostostal Warszawa Group focuses a significant part of its resources on the realisation of construction of new power units no. 5 and 6 in Opole Power Plant. The works in Opole are proceeding according to the established schedule, and are 65% complete. The remaining part of the Group's portfolio is filled with contracts in general building, industrial, infrastructure and environmental protection construction.

In the context of a good financial situation, the Mostostal Warszawa Group also expanded cooperation with financial institutions to increase lines of credit and guarantee, enabling us to acquire new contracts. Since the beginning of 2016, the Group increased the limits within the guarantee lines for construction contracts by PLN 177 million.

On March 8th, 2017, the Supervisory Board approved the financial results for the year 2016 and recommended that the net profit is allocated to cover losses from previous years.

Based on analysis of cash flows, as well as the structure of the portfolio of orders, I estimate that the year 2017 will be a year of continuation of the positive economic results of the Mostostal Warszawa Group.

Consolidated financial statements of Mostostal Warszawa for 2016 will be available in the Periodic Reports tab.