TORPOL Group has made record profits
TORPOL has been dynamically increasing its earnings for another quarter in a row. As a result, after three quarters of 2022, the Group generated a consolidated gross profit on sales of PLN 149.4 million (+107 per cent year-on-year), and EBITDA reached PLN 140.5 million (+119.3 per cent year-on-year). The Group’s net profit was PLN 105.8 million (+194 per cent). Revenue for the period was PLN 731.8 million compared to PLN 772.7 million achieved a year earlier. A quarter before year-end, the gross margin on sales reached 20.4 per cent (+11.1 p.p. y-o-y). The Group ended the third quarter with cash of PLN 387.1 million.
– Despite a very difficult operating environment, we are recording profits this year and there are many indications that the whole of 2022 could be the best year in TORPOL’s history in this respect. To a large extent, we have achieved such good results by applying cost discipline, engaging our highly qualified, competent engineering and administrative staff, and also by having a technical facility with highly specialised machinery for railway works and a wide range of other construction equipment. As a result, this guarantees us timely, highly cost-effective and quality construction work on ongoing projects. These results were also positively impacted by the non-materialisation of significant risks included in the original valuations of major projects acquired in 2019.
However, the results of 2022 are slowly becoming history, and an extremely difficult 2023 lies ahead. The entire rail construction industry will face a number of challenges, led by the lack of contracts on the market and the resolution of their financing, the associated fierce competitive struggle at every proceeding, fuelled by the use of electronic auctions by the contracting authority, the economic sanctions imposed on Russia resulting in above-average, unpredictable increases in the prices of materials, services, energy and fuels, and the inadequate valorisation adopted for the contracts in progress.
Therefore, with the Group’s stable and strong financial, personnel-wise and technical position, we will be able to face these difficulties, while at the same time carrying out activities related to diversification and development of the Group, commented Grzegorz Grabowski, the President of the Management Board of Torpol S.A.
At the end of September, the Group’s backlog of orders reached PLN 1.2 billion. The company is active and effective in the domestic rail tender market. Recently, PKP PLK selected Torpol’s offer of PLN 691 million gross as the most favourable in a procedure for construction works within the Słupsk station, and earlier in a tender for the modernisation of the Ostróda station (the offer’s value was PLN 312.6 million gross). In the third quarter of this year, the company’s offer (as part of a consortium) proved to be the winner in the tender for railway line 104 Chabówka – Nowy Sącz (value of PLN 963.95 million gross).
However, the construction industry is waiting for more activity from the main ordering party, PKP PLK, which has been lower recently due to blocked EU funds. Additional chances for new orders for TORPOL are the planned investments within CPK, where multi-billion investments are estimated, or the international project Rail Baltica, in which the company intends to participate.
– We are interested in actively participating in railway projects related to the construction of new high-speed rail lines and the modernisation of existing lines for the CPK. We also want to participate in the Rail Baltica project. Together with our foreign partners, we are taking part in the first stage of this international railway project to modernise the overhead line on the rail link between the capitals of Lithuania, Latvia and Estonia and Warsaw and the rest of Europe, says Grzegorz Grabowski.
TORPOL is also committed to diversifying its operations, as evidenced by the development of its subsidiary Torpol Oil & Gas.
– Torpol Oil & Gas has been growing dynamically in recent years. In the coming years, we assume further growth of its operations, involvement in projects with a high degree of innovation and stabilisation of its financial position. An important step in this direction is the recently acquired order from PGNiG S.A. (following the acquisition of PKN ORLEN S.A.) worth PLN 393 million gross, adds Torpol’s President.