Events

PBG Group releases its 2015 financial results

Below are presented the Company’s and the Group’s financial highlights for 2015:

PBG:

•      PBG posted revenue of PLN 122m, down PLN 105m year on year.

•      Gross loss totalled PLN 21m, compared with a PLN 36.8m loss in the previous year.

•      Operating loss was PLN 97.5m.

•      Net loss amounted to PLN 267.5m.

•      The value of the order book as at January 1st 2016 was approximately PLN 155m.

PBG Group:

•      In 2015, the PBG Group took in revenue of PLN 1.8bn, up by 18% year on year.

•      Gross profit was PLN 117.6m, compared with PLN 94.5m in 2014.

•      Operating loss was PLN 190.6m.

•      Net loss attributable to owners of the parent was PLN 177.6m, compared with a loss of PLN 84.4m in 2014.

•      The value of the Group’s order book as at January 1st 2016 was approximately PLN 4.92bn.

DISCUSSION OF PBG’S 2015 FULL-YEAR RESULTS

In 2015, the Company generated revenue of PLN 122m, compared with PLN 227m in the previous year. The significant year-on-year decline in revenue stemmed primarily from the fact that the Company is still in the process of voluntary arrangement, which prevents it from participating in public tenders. The contract for construction of the LNG Terminal in Świnoujście for Polskie LNG is the largest item in the order book.

In 2015, PBG reported a gross loss of PLN 21m, compared with a loss of PLN 36.8m in 2014.

Operating loss was PLN 97.5m, compared with a loss of PLN 53.5m in 2014. The key contributors included:

a)    administrative expenses of over PLN 18.7m, 14% down year on year;

b)    other income of PLN 21m, with the largest item being the revaluation of the provision for the Company’s potential liabilities under the sureties and guarantees issued of PLN 77m, discount on non-current accounts receivable and payable of PLN 3.4m and lease income of PLN 2.8m;

c)    other expenses totalling PLN 70.5m, of which the most significant items were PLN 35.2m impairment loss on assets, PLN 17m fair value measurement of investment property and PLN 14.8m exchange differences on operating activities.

As a result of the above and considering finance costs (less finance income) of PLN 171.2m (attributable chiefly to the recognition by the Company of a PLN 137.2m impairment loss on the investment in RAFAKO shares), net loss was PLN 267.5m in 2015, compared with a loss of PLN 54.5m in 2014.

PBG’s financial results in 2015 vs. 2014

DISCUSSION OF PBG GROUP’S 2015 FULL-YEAR RESULTS

In 2015, the PBG Group reported revenue of nearly PLN 1.8bn, relative to PLN 1.53bn in 2014. The revenue improved mainly as a result of a 31% year-on-year increase in revenue posted by the RAFAKO Group. The contract for construction of the power generation unit at the Jaworzno III Power Plant itself generated PLN 670m in revenue.

In 2015, the PBG Group reported gross profit of PLN 117.7m, compared with a profit of PLN 94.5m in 2014. The share of the oil and gas segment in the Group’s consolidated revenue was 6%, while the power construction segment accounted for as much as 94% of consolidated revenue. These two business segments are the Group’s strategic business lines.

Operating loss of the PBG Group in 2015 was PLN 190.6m, in contrast to operating loss of PLN 46.3m in 2014. The key contributors included:

a)     administrative expenses of almost PLN 90m, which represents a 7% increase on 2014;

b)    other income of PLN 31.9m which included mainly: a reversal of impairment losses on receivables of PLN 7.8m, interest on security deposits of PLN 5m, reversal of impairment losses on accrued contractual penalties of PLN 5.3m and revaluation of the estimated provision for the parent’s potential liabilities under the sureties and guarantees issued and under joint and several liability related to projects of PLN 7.7m;

c)     other expenses, which totalled PLN 220m and included mainly: a PLN 90.9m impairment loss on RAFAKO’s goodwill, PLN 34.5m impairment losses on receivables, PLN 27.2m impairment losses on property, plant and equipment and intangible assets, and PLN 19.6m fair value measurement of property.

The factors described above, combined with net finance costs of PLN 4.5m, produced net loss attributable to owners of the parent of PLN 177.5m in 2015, compared with a loss of PLN 84.4m in 2014.

PBG Group’s financial results in 2015 vs. 2014

As at January 1st 2016, the value of the PBG Group’s order book was approximately PLN 4.92bn, of which about PLN 1.77bn represented orders to be executed in 2015, with the balance of ca. PLN 4.53bn scheduled for execution in the coming years. Power construction projects account for the largest proportion of the order book in value terms (94%), where the Group recognises the contract for construction of the power generation unit at the Jaworzno III Power Plant. The oil, gas and fuels segment accounts for close to 6% of the PBG Group’s backlog, where the Group recognises the contract for construction of the LNG Terminal in Świnoujście.

Table: Order book at January 1st 2016

*The PBG Group provides specialist construction services in the area of gas and oil production and fuel facilities, as well as general contractor services in the power construction segment.

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