Profits in the RES segment and positive profitability in the enclosed structure construction industry in Poland supported the construction group's performance in the first half of 2024.
In the first half of 2024, ERBUD Group generated revenues in the amount of PLN 1.33 billion, compared to PLN 1.58 billion a year earlier (-15.8 percent year-on-year). At the same time, the company generated a gross margin on sales of PLN 101.6 million, against PLN 120.5 million in the same period of 2023. The Group's EBITDA reached PLN 32.3 million and was slightly more than PLN 4 million higher than that recorded in the first half of 2023. The Group's operating profit in the reported period increased by 15 percent to PLN 11.7 million compared to that of 2023. The net profit, meanwhile, equaled PLN 0.6 million, compared to a net loss of PLN 4.7 million in the same period of 2023.
The RES segment was the largest contributor to the Group's performance in the first six months of 2024, which is the responsibility of the contractor and developer ONDE Group. The revenues in this area amounted nearly to PLN 280 million and EBITDA to PLN 33 million. The achievement of such high profitability is mainly due to the rapidly expanding development business. ONDE sold four RES projects with a capacity of 60 MW in the first half of the year. At the same time, the company secured orders for the execution of the sold farms worth more than PLN 160 million.
– ONDE's strategic decision to build a development “branch” was a hit. It provides excellent results for the company itself and tangible benefits for the entire ERBUD Group, as can be seen, for example, in this half-year's results. In the recent months, we have increased our own project portfolio from 829 MW to over 1 GW. This year, ONDE plans to build, or commence the construction of 1–2 projects; in 2025, it could even be several construction sites with a total capacity of more than 200 MW, comments Dariusz Grzeszczak, the President of ERBUD. – Moreover, the company is working intensively to optimize many of the projects already in its portfolio. With hybridization and oversizing, it can gain additional several hundred megawatts at almost no cost – adds Dariusz Grzeszczak.
The first half of the year was also successful for the country's enclosed structure construction industry. It reported EBITDA of PLN 9.4 million with revenues of PLN 653 million. This means a significant improvement in the profitability of this part of ERBUD's business relative to the same period in 2023, when it was slightly strapped. The improvement was achieved with revenues lower by PLN 100 million.
– The enclosed structure market has been quite difficult in the recent months, as there is still no disbursement of NRP funds in sight. The momentary dry spell has companies scrambling for orders, often significantly undercutting prices. We, thanks to our high diversification, can approach tenders with valuations that allow us to achieve satisfactory margins – explains Jacek Leczkowski, the Vice-President of ERBUD.
– We still remain competitive and are increasing contracting. In the six months of this year, we signed contracts worth more than PLN 923 million in the enclosed structure industry, almost double the amount for the first half of 2023, and PLN 2.2 billion for the entire Group, i.e. 30 percent more than a year ago – he adds.
In total, the Group's external order portfolio was worth more than PLN 2.8 billion at the end of June 2024, i.e. about 17 percent more than at the same point in 2023. On top of that, the executive value of the Group's own projects in RES is approaching PLN 1 billion.
As for the industrial maintenance service segment, which is very promising for the ERBUD Group, it recorded a positive half-year, generating a total of about PLN 5.5 million in domestic and international EBIT, with just over PLN 250 million in sales.
MOD21, on the other hand, which manufactures wood modules, tripled its revenues in the first half of the year compared to the same period in 2023, earning PLN 34.2 million. This innovative area of activity, new to the Group, is getting closer to profitability. The company's portfolio currently includes orders worth about PLN 150 million, PLN 100 million of which are expected to be processed later this year – which will mean a nearly threefold increase in sales year-on-year. In addition, the company is expanding into the Polish market. Until now, MOD21 has directed all its production to the German market. This is a response to the time pressures associated with the disbursement of NRP funds. After all, wooden modular buildings are the best way to build quickly, efficiently and environmentally friendly, so it's worth changing our approach to this technology.
– The time has come for Poland, because after the NRP funds had been released, we received many inquiries from local governments looking for a manner to use them quickly while still in the first budget perspective. This mainly concerns educational facilities, subsidized social housing or the extension of clinics and hospitals – explains Bartosz Wiśniewski, the Vice-President of MOD21, and reveals that the company has already won its first Polish contract – it will build a kindergarten in Łysomice, near Toruń.