Erbud (ERB) Q3 2024 earnings summary

Executive summary

• ERBUD Group's EBIT rose 145% y/y for the first nine months of 2024, but net profit dropped to PLN 7.7m from PLN 67.1m due to one-off effects and lower revenues.

• Revenue declined 14% y/y to PLN 2.1 billion, with gross margin stable at 8–8.3% and net margin contracting to 0.4%.

• Significant one-off items included Millennium Bank compensation (PLN 51.4m) and interest income (PLN 60.9m), boosting other income.

• Contracting rose 13% y/y to PLN 2.7 billion, backlog increased 13% to PLN 3.9 billion, and external customer backlog rose 19%.

• The Group operates in construction, renewable energy, and industrial maintenance, with a diversified presence in Poland and the EU.

Financial highlights

• EBITDA rose 59% y/y (adjusted), margin up 1.4 pp to 3.1%; 9M 2024 EBITDA: PLN 65.1m (down from PLN 79.3m).

• Net debt remained low at PLN 66.4m; cash holdings at period end were PLN 207.4m–219.5m.

• Net operational cash flow for 9M 2024 was negative PLN 42.5m, reflecting working capital outflows.

• Modular construction segment achieved positive profitability faster than planned, with an 83% increase in revenue and a 250% increase in backlog.

• ONDE's EBITDA was PLN 41.2m (-1.7% y/y), with net profit at PLN 21.2m (-8.6% y/y).

Outlook and guidance

• ERBUD expects a market rebound in residential construction, with building permits up 26% y/y and analysts forecasting 7–9% output growth in 2025.

• The Group continues to diversify geographically and by segment, focusing on renewables and industrial services.

• ONDE plans to optimize and commercialize its own project backlog, expand in wind and PV, and maintain a gross margin of 7–10%.

• Modular construction to focus on public and educational facilities, with continued growth in Germany and Poland.