Will there be an improvement in Pekabex’s margins in the second half of 2021?
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Pekabex has renegotiated some of the existing contracts, and new contracts are being signed on more favourable terms for the company. Therefore, Pekabex is counting on improved margins in the second half of 2021 compared to the first half of the year.
Representatives of the company informed about renegotiations of contracts and changes in the case of new contracts introduced two months ago. Although not all previously signed contracts have been renegotiated, the company still counts on improving results in the second half of 2021. Market trends and new margins and prices are also expected to help.
Pekabex‘s current backlog has not been disclosed, but according to company representatives, it has not changed much compared to the end of June 2021. At that time, it amounted to PLN 1.04bn. As Beata Żaczek, the company’s vice-president, explains, about PLN 700m of this amount covered contracts for 2021, about PLN 280m was for deals for 2022 and the rest for contracts signed for subsequent years.
Pekabex’s reported revenue growth in the first half of this year was over 34% y-o-y and reached PLN 639.5m. EBITDA fell by 0.9% y/y to PLN 44.7m, while net profit dropped by 26.7% to PLN 22.1m. This was due to price increases of materials and construction services. At the same time, the EBITDA margin fell from 9.4% in 2020 to 7%, the EBIT margin dropped from 7.4% to 4.9%, while the net profit margin was 3.5% compared to 6.3% in 2020.
The company also reported an increase in production, driven by the addition to the group of a newly acquired plant in Germany as well as an increase in the scale of production at the Mszczonów plant and the newly built plant in Gdansk. In the first half of this year, production amounted to 125,625.3 m3, which is a significant increase compared to the same period in 2020, when production reached 93,391.8 m3. The company’s president, Robert Jędrzejowski, points out that demand for prefabrication is currently growing, and Pekabex’s production is occupied until the end of the year. The company forecasts high production volumes, which may translate into the company’s results. According to Pekabex’s CEO, stabilisation of the prices of some materials, or even gradual reductions, can also be expected.
Pekabex is a company that provides solutions for the design, production and assembly of building structures based on the technology of prefabricating reinforced concrete elements. The company is also investing in its development activity, and as the company’s vice-president emphasises, the company plans to realise 20,000-25,000 usable residential spaces per year. Although Pekabex operates mainly on the Polish market, which accounted for 64% of the company’s revenues in the first half of 2021, the company is also active in other markets, such as the German market, where 18% of the turnover was achieved, Swedish – 15%, and Danish – 3%.
Company representatives inform that they do not have any acquisition plans, but remain open to possible opportunities. Currently, the company is focusing on growth and is expanding its capacity by purchasing more machines.
