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In the first quarter of 2019 Torpol recorded an increase in revenues by nearly 25% y-o-y. The company’s order backlog is close to historic value and the liquidation of the Norwegian company is progressing as planned.
Good financial results
Torpol recorded in the first quarter of 2019 consolidated profit of PLN 3.9m profit attributable to equity holders of the parent, compared to PLN 4.1m loss a year earlier. Revenues from sales reached PLN 263.98m, compared to PLN 211.91m in Q1 2018, which is an increase of 24.6%, the company said in its report.
The Group’s good results at the beginning of this year are mainly the result of the high pace and scope of work on the record-breaking portfolio of orders developed in 2017-2018. A strong pressure on margins is still felt, caused by the risk of an increase in prices of construction materials, difficult access to subcontractors, as well as an increase in employee costs. Therefore, it is necessary to take systemic solutions and decisions regarding the valorisation of the current contracts, said Grzegorz Grabowski, President of Torpol. In his opinion, the year 2019 will be very similar to the previous year in terms of operations, but without being burdened by the situation in Norway.
Liquidation of Torpol Norge as planned
At the beginning of this year, the process of liquidation of the Norwegian company Torpol Norge, a member of the Group, began. This is a consequence of, among others, negative financial results of the company resulting from a long-term lack of contracting, difficult situation on the Norwegian tender market or lack of acquisition of an industry investor.
The decommissioning process of Torpol Norge is proceeding according to the adopted plan and within two to three months the whole procedure should be completed. At the end of April this year, the balance of liabilities due to creditors amounted to approximately PLN 1.4m and is systematically decreasing. The company’s situation in Norway has a negligible impact on the Group’s financial results, Grzegorz Grabowski said.
Solid order backlog
At the end of Q1 2019 the Group’s order book included contacts worth over PLN 3bn net (without consortium members). In addition, the company has won two electronic auctions worth over PLN 1.4bn and is awaiting further actions of the ordering party under a tender procedure. Taking them into account, the company’s order book may reach the historical value of almost PLN 4.5bn.