Mostostal Warszawa returns to profitability

The Mostostal Warszawa group has published a consolidated financial report for the group's operations in the first half of 2014. After a few years of negative results, analysts were pleasantly surprised to see that the improvement trend initiated in the first quarter of 2014 has been maintained.

Sales in the first half of 2014 totaled PLN 702 million with a margin of PLN 44 million and pre-tax profits of PLN 13 million. In the case of the main balance sheet data, an improvement was recorded against the data of December 31, 2013, specifically in respect of increased cash which amounted to PLN 77 million (at the end of June, the group's cash amounted to PLN 183 million) and working capital (the difference between current assets and short-term liabilities), which grew to PLN 133 million (at the end of 2013 – negative balance at PLN 60 million). 

The group also cut management costs by 14% against the same period in 2013 and made significant reductions in financial costs, mainly due to last year's conversion of part of the Acciona-granted credits into the group's equity amounting to PLN 202 million. As at June 30, 2014, the group's total assets amounted to PLN 1.474 billion and were 8.5% lower compared to the end of 2013. The main reason behind decreased assets is the sale of unprofitable group companies: (Wrobis and Remak), which had a negative impact on last year's results. Better results were recorded in almost every company within the group, specifically in the mother company Mostostal Warszawa S.A. (sales of PLN 423 million, gross margin at PLN 23 million, pre-tax profits at PLN 7 million), Mostostal Puławy (sales at PLN 149 million, gross margin at PLN 11 million, pre-tax profits at PLN 7 million), Mostostal Płock SA (sales at PLN 53 million, gross margin at PLN 5 million, pre-tax profits at PLN 2 million).

It should be pointed out that these results do not include the complete implementation of the construction of power units 5 and 6 at the Opole power plant, under which Mostostal Warszawa will complete work in Opole for PLN 2.249 billion. It is estimated that in the second half of 2014, the group will carry out work in Opole for a total amount of PLN 150 million.

"The company' board expects further improvement in the financial results in 2014," says Carlos Resino Ruiz, member of the board and chief financial officer at Mostostal Warszawa. In view of the forecasted cash flow analysis and significant involvement in the power sector to be significantly supported through the expansion of power units in Opole initiated this year, a project of key importance to the Polish economy, we are pretty optimistic about the future,” Carlos Resino Ruiz adds.

As at June 30, 2014, the portfolio of the group's orders amounted to PLN 3.5 billion of which PLN 3.218 billion is attributable to the mother company – Mostostal Warszawa S.A. During recent months, the group has also obtained new contracts for a total amount of PLN 367 million. The following is a list of contracts deserving particular attention:

Mazury Airport in Szymany: contractor: Mostostal Warszawa S.A.; ordering party: Warmia i Mazury Sp. z o.o.; completion period: 07.2014-08.2015; contract value: PLN 46 million;
Assembly of pipelines and devices: contractor: Mostostal Puławy S.A.; ordering party: Synthos S.A.; completion period: 04.2014- 02.2014; contract value: PLN 29 million;
Assembly of recovery boiler and 2 electrical precipitators at Mondi Paper Mill: contractor: Mostostal Puławy S.A.; contracting party: Andriz OY; completion period: 7.2014-08.2015; contract value: PLN 19 million;
Crude Oil Terminal in Gdańsk – Stage I: contractor: Mostostal Płock S.A.; contracting party: IDS-BUD S.A.; completion period: 02.2014-12.2015; contract value: PLN 75 million.

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