Budimex, one of Poland’s leading construction companies, is optimistic about revenue growth in 2025, expecting stable margins supported by a robust order book. CEO Artur Popko, revealed the company’s plans to expand its backlog, including potential involvement in the construction of Poland’s first nuclear power plant.

“Our revenues this year will mirror the general trends in construction and assembly production across the country. We expect a slight decline by the end of the year,” Popko explained. “However, we foresee a rebound next year, with stable growth of 6-7% annually in the coming years, just as we’ve experienced in the past.”

Budimex’s current project portfolio, valued at over PLN 15.3 billion as of June, provides the company with a solid foundation. “This portfolio guarantees us work through 2025-2026, and for the first time in our history, we also have long-term contracts extending up to eight years. These contracts represent more than 25% of our backlog and ensure strong prospects for 2026-2027,” Popko noted. He emphasized that these contracts are secured at current market prices and benefit from a valorization process, which should help maintain stable margins similar to previous years.

Budimex is also positioned to take advantage of new investments in Poland, with Popko predicting the company could capture around 15% of the market share for upcoming projects. “We’re confident that future contracts will be signed with margins consistent with what we’ve achieved historically,” he added.

One of the most significant opportunities on the horizon for Budimex is its potential involvement in the construction of Poland’s first nuclear power plant. The company is currently in talks with both Westinghouse and Bechtel, key players in the nuclear project. Budimex’s subsidiary, Mostostal Kraków, has been shortlisted for cooperation with Westinghouse. “We are keen to provide the necessary expertise and resources for this massive project,” said Popko, adding that discussions with Bechtel are ongoing, particularly regarding quality standards and workforce capacity.

Budimex is not only targeting the nuclear plant’s construction but also the associated infrastructure, including railway and road connections and port works. “We are closely analyzing the tender processes from Polish Nuclear Power Plants and are particularly interested in preparatory work. Additionally, we are exploring opportunities for road construction projects that will connect the plant with the Tri-City,” Popko explained.

Budimex estimates that it could secure at least 15% of the available work related to the nuclear power plant, a project valued at around $17 billion. “Given our track record and efficiency in securing contracts, we expect that Budimex and Mostostal Kraków will be responsible for at least 15% of the investment,” Popko concluded.

Budimex, listed on the Warsaw Stock Exchange since 1995 and a member of the WIG20 index, is backed by its strategic investor, the Spanish company Ferrovial. In 2023, the company reported consolidated revenues of PLN 9.8 billion.

Source: Budimex and ISBnews

The Future Inflation Index (WPI), which projects changes in consumer goods and services prices several months in advance, decreased by 0.3 points in October 2024 compared to the previous month. The decline was attributed to lower commodity prices on global markets and reduced expectations of price hikes from both consumers and producers. However, beneath this positive headline, risks remain, especially related to inflation seasonality, growing producer price pressures, and rising food costs globally.

Consumer inflation expectations fell in September, with the percentage of people expecting prices to rise dropping from 88% in August to 83%. Notably, fewer consumers anticipate rapid price increases in the near future. Those expecting prices to rise at the same or slower rates remained stable. Typically, seasonal price declines, particularly in fruits and vegetables at the end of summer, contribute to more optimistic consumer views on future inflation.

In the manufacturing sector, inflation expectations also eased. The proportion of producers planning price increases dropped slightly from 6 percentage points in August to 5.7 percentage points in September. However, this varied significantly across industries. Companies producing consumer goods—both durable and non-durable—showed a strong inclination to raise prices. Food producers were among the most likely to plan price hikes, with a 14 percentage point lead over those planning reductions. Similarly, companies producing clothing, electronics, furniture, and white goods reported an 11 percentage point advantage in favor of price increases.

Producers are being squeezed by rising labor and energy costs, even as demand for durable and non-durable consumer goods holds steady. This has led many companies to consider price increases to offset these rising operational expenses.

Meanwhile, the market for industrial raw materials has stabilized in recent months, with a slight downward trend, particularly in energy commodities. Metals have seen less price relief. However, in contrast, food commodity prices are climbing. The FAO Food Price Index recorded a 3% month-on-month rise in September, driven by higher prices for key staples like sugar, vegetable oils, and cereals, alongside increases in coffee, tea, and cocoa.

Despite the decline in the Future Inflation Index, the outlook for future prices remains uncertain due to both international and domestic pressures. While commodity prices are fluctuating and inflation expectations have moderated, factors like food price increases and industry-specific cost pressures pose potential risks to future inflation trends.