Mostostal Warszawa again with a loss, but with a solid portfolio

PLN 100 billion - this is the cost of transforming the Polish district heating sector.

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Mostostal Warszawa completed the first half of 2019 with a net loss, but with a significant increase in revenues year on year, caused by entering into an advanced stage of the implementation of contracts acquired last year. The value of the capital group’s portfolio currently amounts to nearly PLN 2bn.

Again, the loss

In the first half of 2019, Mostostal Warszawa recorded a consolidated net loss of PLN 7.97m attributable to the shareholders of the parent company, compared to a loss of PLN 23.6m a year earlier. In Q2 2019 alone, the loss amounted to PLN 8.8m. Sales revenues in January-June were at the level of PLN 594.94m, compared to PLN 418.32m, which means an increase by 42% y-o-y. The increase in revenues is related to the advanced stage of implementation of contracts acquired in 2018, the company said.

The financial result of the company for the first half of 2019 was affected by, among others:

  • appreciation of PLN against EUR as compared to the end of 2018, which resulted in recognition by Mostostal of positive exchange rate differences from balance sheet valuation of loans from Acciona Construccion,
  • write-down of a tax asset (PLN 2.66m) in connection with the recognition of a part of costs as not constituting a tax deductible cost,
  • financial costs due to interest on loans received from Acciona Construccion (PLN 4.9m),
  • further increase in prices of materials and services of subcontractors, thanks to which margins on contracts concluded 2-3 years ago are lower than assumed.

Nearly 2bn in portfolio

At the end of the first half of 2019, the portfolio of the Mostostal Warszawa capital group included contracts with a total value of PLN 1.98bn, of which PLN 1.71bn belonged to the company itself. The portfolio is mainly filled with contracts from the infrastructural and general construction sectors. The largest customer for the group’s services in H1 2019 was PGE GiEK with 11% share in sales.

9 August 2019 Mostostal Warszawa and GE Power Sp. z o.o. concluded a contract for construction works in Ostrołęka C Power Plant. Its net value amounts to PLN 609m. The scope of works includes partial construction works within the main building, construction of carburizing facilities, auxiliary taverns, networks, as well as roads.

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