In Q2 2019, Elektrobudowa recorded a consolidated net loss of PLN 103.67m attributable to the shareholders of the parent company. After the announcement of the financial results, the industrial group Zarmen resigned from the plans of capital entry into the company.
Fatal financial results
Elektrobudowa reported a consolidated net loss of PLN 103.67m in Q2 2019, compared to a loss of PLN 61.84m a year earlier, the company said. In Q1 2019, the company was also on the downside, so H1 2019 posted a net loss of PLN 110.31m.
Consolidated sales revenues reached Q2 2019 PLN 121.22m, compared to PLN 152.17m in the previous year (-20% year on year), while in the entire first half of the year it was PLN 256.41m, compared to PLN 301.25m in the first half of 2018 (-15% year on year). Construction and assembly services accounted for 70% of Elektorbudowa’s revenues in January-June 2019, and 25% of electrical engineering products. Other services and materials accounted for 5% of total revenue.
The gross loss on sales for the first half of 2019 amounted to PLN 28.22m and is primarily an effect of a loss generated on three contracts related to:
- electro-assembly works for Budimex at the construction of Elektrownia Turow (PLN 19.03m loss),
- modernization of Konin 220/110 kV substations for Polish Power Networks (PLN 6.39m loss),
- execution of works for Polimex at the construction of units no. 5 and 6 in the Opole Power Plant (PLN 2.97m loss).
Compared to the first half of 2018, the gross loss is lower by PLN 42.62m.
Zarmen resigned from the entrance to the Electrobudowa
Shortly after Elektrobudowa announced its financial results for Q2 2019, Zarmen withdrew from its offer to acquire new shares in the company. On September 13, 2019, Zarmen submitted a binding offer to subscribe for the issue of series F shares, which would give Zarmen a 65% share in the company’s shareholding structure. However, it has now announced that it does not want to be treated as a potential investor interested in acquiring shares in Elektrobudowa.
In the current situation, only the conditional offer submitted by Starhedge, involved in development projects or trade in products for industry, which expressed its willingness to take up less than 33% in the new shareholding structure, remained in the game.
Elektrobudowa offers construction and assembly services, implementing projects related to the energy, petrochemical, mining and public utility buildings in the “turnkey” system. Currently, Jacek Podgorski, delegated to this role for the period of 3 months until 20 October 2019, is the President of the Company.