TORPOL Group with record backlog and in anticipation of rail tenders from PKP PLK and CPK

TORPOL Group, one of Poland’s leading rail infrastructure contractors, has reported its financial results for the first half of 2024. Despite a 30.9% year-on-year increase in net sales revenue, the company reported a decrease in operating profitability and gross profit on sales, mainly due to the completion of higher-margin projects and their settlement by the end of 2023. Consolidated gross profit on sales reached PLN 49.2 million, with a margin of 8.8%, and the Group’s net profit reached PLN 26 million. This compares with PLN 61.4 million and PLN 38.1 million, respectively, in the same period last year.

The TORPOL Group boasts a record order backlog of approximately PLN 4.19 billion net (excluding consortium shares, contingent amounts or replacement communication costs), which ensures that work will be carried out up to and including 2028. The average return on gross sales of the order book held is approximately 6%. Despite the challenges of lower-margin contracts, the company maintains a good liquidity position with PLN 256.7 million of cash at the end of June 2024. The group has no net debt.

‘Given the difficult market circumstances we face, I view the results of the first half of 2024 positively. As announced, during the reporting period we recorded a decline in the profitability of our operations, returning from very high margins to a level typical of the market in which we operate. In April this year, we secured the largest contract in our history and certainly one of the largest contracts in the history of the Polish railway. As a result, we have built a record backlog of around PLN 4.2 billion net excluding consortium members. We have maintained a stable liquidity position. We are very well prepared for the upcoming tenders of PKP PLK and CPK, counting, like the other participants in the market of contractors, subcontractors and suppliers, on their long-awaited announcement,’ said Konrad Tuliński, President of the Management Board of TORPOL S.A.

At the beginning of April 2024, TORPOL (in consortium with Intop Warszawa Sp. z o.o.) signed a contract with PKP PLK to modernise the section Katowice Szopienice Płd. – Katowice – Katowice Piotrowice. The value of the contract is approximately PLN 3.4 billion net, of which approximately 70% is attributable to TORPOL.

‘The execution of the contract with PKP PLK in Katowice is one of the key tasks that will have a significant impact on our business in the coming years. Conducting such a large multi-discipline and complex project involves numerous challenges and risks, the need for many arrangements with the Employer and the City, but we are fully prepared for its implementation. We started construction work in September,’ added President Tuliński.

On the unconsolidated level, TORPOL achieved revenue of PLN 484.3 million, gross sales profit of PLN 42.7 million, operating profit of PLN 22.7 million and net profit of PLN 23.9 million in the past six months.