"Over the past year, the construction sector has seen a significant decline in performance, which is no wonder: the adverse economic conditions have led to a dramatic drop in both public and private investment. The sector has seen a resurgence of the long-unprecedented phenomenon of 'ring-fencing', which can only be controlled by further legislative changes. The persistent labour shortages could be alleviated by the creation of high-quality vocational training centres and, if necessary, Asian guest workers, but the current labour market situation has already put investment at risk.

It is not usual for a domestic construction SME to go public, but for Épduferr it has been a success, with the higher reputation of being listed being an important factor in winning their largest projects. Portfolio asked Milan Palkovics, Chairman of the Board of Directors of Épduferr Plc, about the key challenges facing the construction industry, the details of the IPO and their new venture to develop an innovative energy storage solution, which they recently launched."
 
Source: Portfolio
András Gergely
13 July 2023 09:00
Photos by Ákos Kaiser

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"In an interview earlier this year, he predicted that, given the unfavourable economic conditions, the construction industry's performance could fall by up to 50 percent, with one in two construction firms going out of business. Have these fears been borne out?

There are statistics on several metrics, with the number of new building permits in the first quarter of this year down by virtually half compared to a year ago, and the order book down by 30-50 percent compared to a year ago, and the order book down by 30-50 percent in recent months. Since we are also involved in the building materials trade - my experience shows that we are indeed seeing a significant drop in output, there may be a significant number of firms going out of business.

AND RECOVERY IS UNLIKELY IN THE SHORT TO MEDIUM TERM.

To what extent has the negative economic environment determined Épduferr's business results? According to public company data, revenue, EBIDTA and profit before tax have all decreased compared to 2021. What factors are behind this and what are the expectations for this year?

Our results were largely influenced by the fact that we made several strategic decisions with high resource requirements, and we made major investments and developments. We have prepared the company for an expected turnover of EUR 10 billion in 1-2 years. We have diversified our operations even further, with activities in building materials trading, steel structures and components, steel trading and general construction...."

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