The Management Board of Unibep SA (Issuer) announces that, following the completion on 19 May 2025 of the process of aggregating preliminary financial data conducted for the purpose of preparing the financial statements for Q1 2025, the Issuer has decided to disclose to the public selected preliminary estimated financial and operational data of the Unibep Capital Group (the Capital Group) for Q1 2025, which were published on the same day in the ESPI stock exchange information system.
Below, the Management Board of the Issuer provides a commentary on the presented preliminary estimated data.
The operations of the Capital Group in the analysed period of 2025 generated slightly lower revenue compared to the corresponding period of the previous year, but with a significantly higher gross profit from sales.
The lower revenue is primarily due to slower progress in the execution of construction contracts compared to the corresponding period of the previous year, particularly in the general construction segment, where the revenue depends on achieving specific milestones set out in the implementation agreements with investors. This phenomenon is temporary, and an acceleration and peak of these works are expected in the coming quarters.
The Management Board of the Issuer wishes to point out that the overall operating profitability achieved by the Capital Group in Q1 2024 was influenced by a one-off event recorded within the development segment activities. The subsidiaries of the Issuer, operating within the structures of the Unidevelopment Group, at that time adopted resolutions to discontinue the preparatory work on their selected land plots intended for residential projects and to hold these lands to benefit from the increase in their value. This decision entailed the reclassification of these land plots from inventories to investment properties and their valuation at fair value. The effect of these events impacted other operating income by approximately PLN 100 million, as shown in the table above.
The Issuer emphasises that when analysing the results for Q1 2025 against the financial data for the corresponding period of the previous year, one should consider the one-off nature of the aforementioned events. The results for last year, adjusted to exclude the effects of these events, indicated an operating loss of PLN 1.3 million, as shown in the table below. Thus, the financial results achieved by the Unibep Capital Group for Q1 2025 are significantly better than those of the previous year, both at the operating level and in terms of net profit.
The estimated sales results for Q1 2025 mentioned above were influenced by phenomena observed in individual business segments, including:
- The construction segment (a decrease of 10.1%), which comprises the power, infrastructure, and general construction segments. The general construction segment comprises the structural construction, presented in previous current and periodic reports, as well as the industrial segment, separated from the power and industrial construction segment. The changes in revenue levels achieved in Q1 2025 compared to the corresponding period of the previous year, by business segment, are as follows:
- The general construction sector (a year-on-year decrease of 42%), primarily impacted by low contract acquisition throughout 2024, resulting in a declining order backlog.
- The power construction segment (increase of 158% y/y);
- The infrastructure construction segment (increase of 56% y/y);
At the same time, an increase in revenue was recorded in the following segment:
- The development segment (increase of 85% y/y), following the process of formal handovers of residential units in line with the adopted schedules.
At the same time, an increase in revenue was recorded in the following segment:
- The development segment (increase of 85% y/y), following the process of formal handovers of residential units in line with the adopted schedules.
In Q1 2025, the Capital Group generated an operating profit of PLN 4.4 million, compared to a loss (excluding the effect of the aforementioned one-off events) of PLN -1.3 million recorded in the corresponding period of the previous year, representing a positive variance of PLN 5.7 million. This operating profit was influenced by the results achieved across the individual business segments, which are discussed in the following sections of the commentary.
In addition to the above-mentioned factors, in Q1 2025 the Capital Group recorded an increase in administrative expenses of approximately PLN 2.4 million (i.e. 11%) compared to the previous year. This was driven by salary adjustments introduced in the second half of 2024, as well as different staffing levels — particularly related to the process of building central structures (including Operational Controlling) — which the Issuer had previously reported in successive published statements throughout last year.
Regardless of the results achieved in operating activities, Q1 2024 saw higher financial expenses (an increase of approx. PLN 2.8 million net), caused on one hand by higher interest costs, and on the other by negative valuation of hedging instruments for currency positions, which, in accordance with accounting principles, are marked to market during reporting periods. It is worth noting that, given the relatively high effectiveness of the currency position hedging processes, the Unibep Capital Group can be expected to realise positive exchange rate differences on open currency positions subject to such hedging in upcoming reporting periods. This applies to revenues from export contracts or costs of imported materials or services denominated in USD or EUR. These will gradually be recognised as positive exchange rate differences realised at the operating profit level, in line with the increasing progress of active contracts.
As a result of the above factors, the Capital Group reported a net loss of PLN 4.0 million, compared to a loss of PLN 4.9 million excluding the impact of the aforementioned one-off events recorded in the corresponding period of the previous year.
At the end of Q1 2025, the cash balance of the Capital Group amounted to PLN 105.7 million, compared to PLN 167.5 million at the end of Q1 2024. This position offsets financial debt (excluding lease liabilities from leases) amounting to PLN 365.2 million as of 31 March 2025, compared to PLN 335.1 million as of 31 March 2024. The net debt level of the Capital Group, amounting to PLN 260 million as of 31 March 2025, thus increased compared to the corresponding period of the previous year, following the need to finance losses incurred and recognised on an accrual basis in 2023. The Management Board wishes to point out that the level of net debt remains in line with internal plans and is at a level that ensures compliance with all financial covenants expected by financial institutions and bondholders. This parameter and the factors influencing its level are subject to ongoing and continuous monitoring.
In the entire first quarter of 2025, in the construction segment, which includes the power, general, and infrastructure construction segments, the recognised sales amounted to approximately PLN 355 million (a decrease of around 10%).
The decline was primarily driven by negative deviations in the general construction sector. The lower level of production compared to the same period of the previous year (a 42% year-on-year decrease) was caused by reduced, selective, and cautious contracting throughout 2024, which resulted in a declining backlog of orders as of 31 December 2024, for execution in 2025 and beyond, but also by lower construction activity during the winter period. The general construction segment comprises the structural construction, presented in previous current and periodic reports, as well as the industrial segment, separated from the power and industrial construction segment.
A significant increase in revenue was achieved in the power construction segment (158% y/y), within which the revenues from investments signed in 2024 have been recognised since the beginning of the current year based on their progress, and which now enter the phase of intensive implementation. An important factor explaining the deviations is also the so-called low base effect in 2024 caused by a selective approach to signing new construction contracts, which took place in the previous year.
Within the entire construction segment, a very strong turnover growth (56% y/y) occurred in the infrastructure segment, whose analysed sales results indicate positive dynamics also driven by the so-called low base effect, mainly following the execution of design-and-build contracts that entered the implementation phase this year.
As a result of the above-mentioned factors — and also due to the fact that loss-making contracts ceased to exert a significantly negative impact on operating activity last year — the gross profit margin from sales improved significantly, rising from +1.8% recorded in the first quarter of 2024 to +5.6% recorded in the current year, including:
- power construction: an increase in gross profit margin from a gross loss of –6.0% to a gross profit of +8.5%;
- general construction: an increase in gross profit margin from a gross profit of +2.2% to a gross profit of +6.5%;
- infrastructure construction: a decrease in gross profit margin from a gross profit of +4.3% to a gross profit of +0.8%, caused by temporarily unallocated overhead costs related to asphalt mixing plants, due to seasonality effects (i.e. low internal asphalt production during the winter period).
Cautious contracting in 2024 led to a reduction in the backlog of orders, which as of 31 December 2024 amounted to PLN 3.0 billion for the construction segment. At the end of the first quarter of 2025, the backlog of orders in this area of operations amounted to PLN 2.9 billion.
The value of construction contracts concluded and signed in the first quarter of 2025 amounted to PLN 275 million, which is lower than in the corresponding period of the previous year. On the other hand, contracts with a total value of PLN 1.1 billion were awaiting signature in the so-called “pipeline,” a significant portion of which, amounting to PLN 660 million, was already signed in April or May 2025, which is a very optimistic result.
The Management Board of the Issuer wishes to highlight the fact that, regardless of the above, the quality of the backlog of orders this year, measured by direct sales profitability, is remarkably better, which will have a significantly positive impact on operating results in upcoming periods, something the Management Board has repeatedly communicated during previous earnings calls.
The acquisition activity indicates diligent implementation of the assumptions presented and discussed with a broad group of stakeholders, related to the pursuit of geographic and segmental diversification. The Infrastructure Branch has currently received information about securing first place in a public procurement procedure for construction of the Starogard Gdański bypass. The Issuer’s offer amounts to approximately PLN 332 million net and has been deemed by the contracting party as the most favourable. Accordingly, the Unibep Capital Group intends to proceed with implementing its previously outlined strategy to expand acquisition activities into new provinces. Until now, the activities of this segment have focused on Podlaskie, Warmińsko-Mazurskie, and Mazowieckie voivodeships, and with the acquisition of this contract, we aim to initiate the process of market penetration beyond the current geographic areas of operation.
We are increasingly active in the energy sector through projects involving cogeneration, biomass boilers, gas and oil boilers, and waste incineration plants. As a result, a large contract worth PLN 208 million for the construction of a biomass boiler plant in Pruszków, Mazowieckie voivodeship, was signed recently, and additional orders are awaiting information from the contracting parties.
In general construction, noteworthy contracts have been secured in the military sector. In the first quarter of 2025, a contract was secured for the Military Property Agency at the Powidz Garrison located within the military complex in Powidz, Wielkopolskie voivodeship. Its value amounts to PLN 235 million net, while new additional orders are currently awaiting decisions.
The sales of the development segment in the first quarter of 2025 amounted to PLN 62.8 million, compared to PLN 33.9 million in the corresponding period of the previous year. The approx. 85% increase in the segment’s revenue was in line with the assumptions based on the schedules of ongoing development projects.
Similarly to the commentary on the first quarter results of the Capital Group, the Management Board of the Issuer would like to point out that the overall operating profitability achieved by the Unidevelopment Group in the first quarter of 2024 was influenced by a one-off event recorded within the development activity. The subsidiaries of the Issuer operating within the Unidevelopment Group at that time adopted resolutions to cease preparatory work on selected land properties intended for residential projects and to retain those properties in order to benefit from an increase in their value. This decision required the reclassification of these land properties from inventory to investment property and their valuation at fair value.
When analysing the results of the first quarter of 2025 against the adjusted results of the first quarter of 2024, an improvement was recorded both at the operating and net levels. Below, the Issuer presents the estimated preliminary financial results of the Unidevelopment Group for the Q1 2025 and the Q1 2024, adjusted for the aforementioned one-off event.
As a result of the financial data aggregation process, the preliminary estimated financial figures for the Q1 2025 indicate that the Unidevelopment Group generated a gross profit from sales of PLN 15.8 million during the period, compared to PLN 8.7 million recorded in the corresponding period of the previous year, representing an 82% increase.
In the results of this segment for the Q1 2025, the Capital Group recognised the sale (handover protocols of residential units) of 58 units, compared to 42 units in the corresponding period of 2024. During the same period, development sales reached a volume of 50 units (including 2 units within joint ventures), compared to 89 units (including 26 within joint ventures) in the corresponding period of 2024, representing a 44% decrease. It stems from a significant correction currently taking place in the housing market compared to the market conditions that characterised previous periods.
In the first quarter of this year, the Unidevelopment Group conducted sales in 9 investments. At the end of the reported period, the Unidevelopment Group had concluded 14 reservation agreements for residential units in ongoing investments. In the first quarter of 2025, the Unidevelopment Group began handing over units in Sadyba Spot development in Warsaw’s Mokotów district. It also began construction and sales of residential units as part of the second phase of the Kusocińskiego development in Gdańsk. This year, the Unidevelopment Group plans to begin handing over units to clients in two additional projects and to introduce three new residential developments to its offer.
During the analysed period, the volume of the above-mentioned development sales was influenced by the implementation schedule of investments by companies within the Unidevelopment Group, as well as market conditions and an unfavourable macroeconomic environment, which resulted in limited availability of mortgage loans and caused some clients to delay their purchasing decisions. In the opinion of the Company’s Management Board, a 0.50 percentage point reduction in NBP interest rates (as of 7 May 2025) and the very likely cycle of interest rate cuts by the NBP, given the fact that core inflation has been declining for three months, should be a factor contributing to a significant increase in demand for housing.
In the first quarter of 2025, the modular segment managed and supervised by Unihouse SA achieved sales of approx. PLN 28 million, which is about 44% lower than in the corresponding period of the previous year (a decrease of PLN 21.6 million). Operating profitability was recorded at PLN -3.6 million, thus being lower than in the corresponding period of the previous year.
The gross profit from sales in Q1 2025 was comparable to the figures from the previous year. However, the main factor contributing to this result were the events related to realised exchange rate differences, the valuation of which was reversed under financial activities (approx. PLN 2 million) and, being realised, transferred to operating activities. This was related to a successful court case and the inflow of funds in NOK (over NOK 27 million invoiced at a higher PLN exchange rate than the rate at the time the cash flows were recorded).
During the analysed period, the contracting and the backlog of orders were at a higher level compared to the first quarter of 2024. However, the lower sales were the result of weaker market conditions in Germany and Scandinavia, as well as a delay in signing contracts on the Polish market, which entered production during the quarter rather than at the beginning of January 2025. This, in turn, led to a temporary decline in production volume of approx. 10% compared to the previous year.
Despite the unfavourable market conditions in the modular construction segment on export markets, the Management Board of Unihouse SA is actively expanding its presence in the Polish market, resulting in additional contracts being added to the backlog of orders. As of today, the backlog of orders already includes contracts for over 18,000 m2 of modular space, compared to just under 14,500 m2 produced in the entire year of 2024. Several important contracts on the Polish and German markets are still in preparation and development and are expected to be finalised around the turn of the second and third quarters of 2025.
The Management Board of Unihouse SA has a positive outlook on the prospects related to focusing acquisition efforts on the Polish and German markets, where the Unihouse brand is already well recognised.
PERSPEKTYWY
THE OUTLOOK
The Management Board of Unibep S.A. maintains its previously stated position that the greatest contracting prospects continue to lie in the infrastructure sector, with relatively strong potential also in the energy sector, as well as in the general construction segment related to the military.
In the first quarter of 2025, the Unibep Capital Group secured construction contracts with a total value of over PLN 0.3 billion. As a result, as of 31 March 2025, the order portfolio for execution in future periods amounted to PLN 2.9 billion, compared to PLN 3.0 billion as of 31 December 2024. It is worth noting that after 31 March 2025, contracts with a total value of over PLN 0.66 billion were signed (as of 20 May 2025), indicating that the backlog of orders is expected to grow in the second quarter of 2025. Additionally, the value of contracts currently pending signature amounts to approx. PLN 0.47 billion.
The Issuer’s Management Board intends to continue a selective policy of choosing contracts in the construction and modular segments that offer optimal economic performance. This policy will decisively and positively contribute to the continued improvement of operational profitability in the upcoming reporting periods.
In the case of the development segment, the Management Board will continue to implement sales plans in accordance with schedules for individual investments and a carefully considered pricing policy for individual customers.
Within the infrastructure area, the contracting plan was already implemented after the first quarter of 2025. After the balance sheet date, i.e., after 31 March 2025, the value of signed contracts in the infrastructure sector amounted to PLN 0.25 billion, while contracts pending signature already total PLN 0.35 billion.
This sector faces significant prospects for 2025, both in terms of road investments and railway investments. In the coming quarters, the infrastructure sector’s activities will focus on leveraging the potential related to geographic diversification and seeking contracts in new geographic areas in line with announced tenders, as well as further increasing the share of large contracts in the order portfolio.
Currently, the infrastructure segment holds a strong market position in northeastern Poland but intends to establish a presence in other parts of the country. The bid submitted by the Issuer in the public procurement procedure — for example, the discussed “Construction of the Starogard Gdański bypass along national road no. 22”—was selected as the most advantageous by the GDDKiA Branch in Gdańsk, as announced in a separate report. We expect that, following a possible appeals process, this contract will be awarded to our organisation, marking our first acquisition success resulting from the currently implemented market penetration strategy.
We are analysing our opportunities and prospects for establishing operations in the Wielkopolskie and Świętokrzyskie voivodeships, where we anticipate numerous tenders. We are monitoring government and market announcements regarding the allocation of public funds. The GDDKiA has announced ambitious plans for the construction of motorways, expressways, and bypasses, and we want to actively participate in these efforts.
The railway market is also an area of strong interest for us. We currently have consortium capabilities, confirmed by an appropriate agreement, to pursue railway contracts, which according to PKP PLK’s announcements, may total between PLN 15 and 20 billion this year. As a consortium partner, we can carry out general construction work on such projects, and we are currently working with our partners to prepare a bid for a very important section of the E75 railway line between Ełk and Białystok.
The Management Board of the Issuer continues to see significant opportunities in bidding within the energy segment. This is our youngest segment, which has been developed since the end of 2021. Market announcements indicate that significant streams of public funds are planned for investments in the energy segment. Significant investment plans in the energy sector have also been announced by many major players in the market, such as Orlen. What characterises this activity is the relatively high profitability in project execution and high entry barriers, including capabilities related to performance guarantees, which in turn results in less price competition among bidders.
Our acquisition focus is concentrated on three areas of bidding and contracting. These will be (i) cogeneration power plants. Last year we secured a contract as a partner in a consortium for the construction of such a facility in Elbląg for 167 million PLN, (ii) district heating. It means, that we already have projects and references and our activities are already currently yielding positive results, (iii) and the new markets, the areas we intend to develop, which will enable us to accelerate the improvement of operational profitability.
We intend to monitor the market and selectively approach energy contracts, build strong and healthy consortium relationships, and consciously strengthen our potential in this segment for the future. One of the scenarios for strengthening the position and building potential may be the initiation of the M&A process, for which the company is gradually preparing, supported by further strengthening its financial position.
The Management Board of Unibep SA has been focusing its contracting activities since the beginning of the year on acquiring orders primarily from the energy sector, including cogeneration and district heating. Acquiring technological orders will provide an additional profitability boost, which, in the entire mix of the executed backlog of orders, will contribute to maintaining and even further improving the operating profitability indicators of Unibep SA at the level of 1.5% to 2.2% throughout 2025.
In the general sector (domestic and export), contracting activities will be focused on a selective approach to new non-residential orders, including military ones, as well as on the continued pursuit of projects with the highest bidding profitability. The recent decisions made by the Management Board, namely the establishment of the General Construction division, once again adjust the organisational structure to effectively leverage synergies within the organisation and more efficiently capitalise on exceptional market opportunities. To this end, starting from the beginning of the current year, the industrial construction was separated from the energy sector and merged with the structural construction segment, creating the general construction segment. Its task is to focus intensively on acquiring more technologically advanced and complex contracts, providing a stronger foundation for strengthening the position and improving profitability. We see potential and opportunities in the military investments, public utility facilities, and industry — exemplified by the contract with the Military Property Agency for the investment in the Powidz military complex in Wielkopolskie Voivodeship, valued at 0.23 billion PLN.
Our activity can be strengthened by the newly redefined regionalisation of the sales structures. We also maintain our readiness for further development in Eastern markets. We are currently working on the Embassy of the Republic of Poland in Minsk (Belarus) and are starting to build the “Shehyni” border crossing on the Ukrainian side of the border. In Ukraine, we have structures that enable us to return to this market on a broader scale, and we plan to open a sales office in Kyiv already this year.
Currently, the structural construction market is stagnant. According to preliminary data from the Central Statistical Office (GUS), construction and assembly production increased by only 0.2% y/y in Q1 2025. As a result, it may turn out that revenues from this business segment, which is currently characterised by very intense price wars among participants in the bidding processes, will also stagnate in the second quarter of 2025. On the other hand, following the acquisition of more technologically and execution-wise complex contracts, including those from the non-residential sector, there is an opportunity to continue the process of sustained profitability improvement in this area of activity.
The Management Board of Unidevelopment SA (the parent company of the Unidevelopment Capital Group), like the entire Unibep Capital Group, perceives the current slowdown in the development market as a temporary pause in its continuous growth. The demand for apartments in our country remains high, and Unidevelopment SA has the necessary know-how and a well-known, recognisable brand that enables further growth and the use of opportunities within the sector. The Management Board of the Issuer is confident that the competencies, experience, and market position allow for the execution of further projects. We are considering executing the work either independently or in collaboration with external partners. With the further improvement of the financial situation of the entire Unibep Group, we expect to accelerate the further development of the development business, including the introduction of new investments in the development portfolio.
The inflation decline forecasted by analysts and the May 0.50 percentage point reduction in NBP interest rates (the first reduction since October 2023) is, in the Management Board of Unidevelopment SA opinion, expected to be a stimulus for the residential market development and to boost demand for housing in 2025.
It is worth noting that the development scenarios for this segment include new models of cooperation with external partners, as well as expanding the developer offering to include apartments outside the popular segment The development of the premium segment is being considered, as it is less affected by market slowdown due to its lower dependence on the creditworthiness of buyers of such apartments. Our intentions for the upcoming quarters are focused on acquiring attractive plots of land representing this part of the development segment.
By the decision of the Supervisory Board of Unibep SA, the process of selling Unihouse SA has been suspended, and the company remains within the Capital Group. As a result, Unihouse SA intends to focus on activities that support its profitability and development, particularly within the Polish market, which has the potential for growth owing to the funds from the KPO programme being directed to this market.
The company has historically built its potential in the Norwegian market, but factors beyond its control, such as the difficult market situation following the pandemic, the declining Norwegian krone exchange rate, as well as rising costs of specialised freight and the overall economic slowdown in that market, have caused its profitability there to be disrupted. Similarly, in Germany — the recession, which has already lasted for two years, limits the opportunities for market penetration and the prospect of sales growth. The investments in the company's portfolio complement the production for the Polish market. Their contracting does not take place at any cost but is conditioned solely by the achievement of positive economic effects.
The Issuer’s Management Board believes that special attention should be given to the Polish market and the opportunity to leverage the potential emerging there. Previous experience in collaboration with the military sector (where we are currently constructing barracks buildings in Tomaszów Mazowiecki) and cooperation with clients in the residential construction sector (such as Social Housing Initiatives) can be further continued. An advantage of modular construction is its speed of execution, which provides an edge over traditional construction in terms of investors’ ability to utilise public funds (KPO) and the relatively short deadlines for their final settlement.
The Management Board of the Issuer reaffirms its previous statements that the actions taken in the bidding process will secure module production to an extent that will accelerate operational results and ultimately achieve a positive profit at the EBIT level.
The overarching goal of all actions and initiatives is to prepare a sustainably profitable and financially liquid Unibep Capital Group, taking advantage of market opportunities and providing value for shareholders. The Management Board is convinced that the reorganisation activities described above, initiated in 2023 and continued in 2024 and 2025, will enable Unibep SA to return to the implementation of its dividend policy as early as 2025.
The Management Board of the Issuer wishes to point out that the presented financial data of the Capital Group represents a true and accurate reflection of the knowledge held in this respect as of the publication date of this study.