Awbud Group recorded a net loss of over PLN 5m in Q1 2019, the company said in its financial report. Revenues from sales in this period increased by 11% y-o-y.
During the first three months of 2019 Awbud recorded a net loss of PLN 5.3m, compared to a profit of PLN 0.3m in the corresponding period of last year. The net result is burdened by, among other things, a negative gross margin on sales of contracts in the amount of almost PLN 0.9m. In the first quarter of 2018. Awbud achieved a positive gross margin of PLN 4.2m.
The main reason for the loss is the increasing cost of materials and labour. Awbud states in its report that the increase in costs, which is higher than the dynamics of growth in the prices of sold construction products, makes the contracts concluded in 2015-2017 unprofitable.
Increase in revenues
Sales revenues in Q1 2019 amounted to PLN 50.5m, compared to PLN 45.3m a year earlier. This means an increase in revenue by 11.4% y-o-y. Sales in the construction and assembly business amounted to PLN 36.3m, which is a result of 5.7% higher than in Q1 2018. Revenues from installation services amounted to PLN 14.2m, which means an increase by 28.7% y-o-y.
Awbud with Murapol
Last year, Awbud concluded an agreement with Murapol under which the company will be the general contractor for Murapol’s housing investments. The alliance will be in force in the years 2019-2021, which will translate into revenues of PLN 200m annually.