Profits of building firms in CR drop by 35 pct 2010-12 - analysis

published:

updated:
06.01.2014 10:50

Prague - The profit of the 81 biggest Czech construction firms fell by 35 percent to Kc3.6bn in 2010 to 2012, and the companies' total sales dropped by 18.5 percent to Kc143.3bn in the period, according to an analysis made public by consulting company Bisnode today.

foto

Stavba silnice. Ilustrační foto. ČTK ČTK

"The results of our study show that construction companies on the market are literally fighting to survive and compete hard for each contract," Bisnode's analyst Petra Stepanova said.

Besides, the current situation on the market negatively influences employment in the segment, Stepanova said.

The number of employees in the construction industry has dropped by 3,465, that is by 10 percent, in the past two years.

"The entire segment is suffering from the consequences of economic recession, banks' restricted credit and above all lack of state as well as private orders," Stepanova said.

The highest profit (Kc702.5m) among construction companies was generated by Eurovia in 2012. The highest sales (Kc20.66bn) were recorded by company Metrostav.

The sales of the 69 major producers of building materials rose from Kc52.6bn in 2010 to Kc58.3bn in 2011, but a year later they fell to Kc54.1bn. This means the sales rose by 3 percent in 2010-3012.

In contrast, the profit of the companies fell by 30.1 percent to Kc3.2bn in the period, and the number of their employees decreased by 1.4 percent.

The most profitable company among producers of building materials in 2012 was Ceskomoravsky cement with a profit of Kc776.75m. The company Saint-Gobain Construction Products CZ generated the highest sales of Kc3.9bn.

The Czech construction segment has been in crisis for five years already.

Still in 2008, the value of the Czech construction output reached Kc547.5bn, while in 2012 the output dropped to Kc424bn. Since 2009 the Czech construction sector has lost Kc277bn.

First construction companies have been forced into bankruptcy due to lack of investment.

A total of 767 construction companies with more than 50 employees operated on the Czech market still in 2008, but four years later the number dropped to 603.

The total number of people employed in the construction segment also declined significantly.

Before the start of the downturn, that is in 2008, the segment employed 416,142 people. But at the end of 2012 the number was 380,586, which was a drop of 11.3 percent compared with 2008.

Written by:
www.ctk.cz

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