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Budimex sees higher profit on Polish building boom

Pawel Kozlowski and Nathaniel Espino

Published 05/01/2010 | 16:45

Budimex, Poland’s second-largest construction company, predicts sales will rise by as much as 20pc this year and operating margin will widen as the country builds more roads before the 2012 European soccer championships.

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The builder, a unit of Spain’s Ferrovial, forecasts revenue growth of 10pc to 20pc, Chief Executive Officer Dariusz Blocher told reporters in Warsaw today.

Earnings before interest and taxes in 2009 were 5pc to 6pc of sales, and this measure, known as the Ebit margin, will rise this year.

Budimex shares jumped as much as 4.6pc to 76.75 zloty, closing at a one-month high of 75.75 zloty.

“We had a very good year in 2009 and our business is set to post solid growth this year,” Blocher said. “Sales and profits will increase further.”

Budimex bid today to upgrade the train station in the southwestern city of Wroclaw, a job it estimates will be worth about 300 million zloty (€73m), Blocher said.

It is also interested in completing a new stadium in Wroclaw after the city authorities canceled a 598 million-zloty contract with Mostostal Warszawa SA and J&P Avax SA last week.

PKP SA, Poland’s state railway company, got one bid for the Wroclaw station upgrade, for which it has budgeted 160 million zloty, Michal Wrzosek, a spokesman for PKP, said by phone today.

Poland is investing €20bn to build and upgrade stadiums, roads, airports and hotels as it prepares to co-host the 2012 soccer tournament with neighboring Ukraine. Budimex gets about 70pc of its sales from building roads.

The company’s order book stands at 5.2 billion zloty to 5.3 billion zloty, and 2009 pretax profit will be more than 220 million zloty, Blocher said. Its nine-month pretax profit stood at 153.2 million zloty, up 57pc from a year earlier.

Fourth-quarter results will be a “big positive surprise” for investors,” said Blocher, who took the helm on September 30.

The Ferrovial unit plans to pay a dividend from 2009 profit, with the per-share level “close to” the 5.84 zloty paid from 2008 earnings, the company’s first payout since its shares started trading in Warsaw in 1995, Blocher said.

Bloomberg

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