22
PRESENTATION J.W.CONSTRUCTION HOLDING S.A. PERFORMANCE FOR THE 1ST HALF - YEAR OF 2009 31 August 2009
PRESENTATION J.W.CONSTRUCTION HOLDING S.A.
PERFORMANCE FOR THE 1ST HALF - YEAR OF 2009
PRESENTATION J.W.CONSTRUCTION HOLDING S.A.
PERFORMANCE FOR THE 1ST HALF - YEAR OF 2009
31 August 2009
SPIS TREŚCISPIS TREŚCI
2
CHANGE IN ACCOUNTING POLICY 3
CHANGES IN ACCOUNTING POLICY – OUTCOMES 4
PERFORMANCE IN THE 1ST HALF OF 2009 5
1ST HALF OF 2009 GROSS SALES PROFIT 7
IMPLEMENTED PROJECTS IN THE 1ST HALF OF 2009 8
ENDED INVESTMENTS IN THE 1ST HALF OF 2009 9
STRATEGY OF J.W. CONSTRUCTION HOLDING S.A. 10
STRATEGY - DIVERSIFYING OPERATIONAL RISK OF THE GROUP 11
STRATEGY - APARTMENTS READY TO MOVE IN 18
STRATEGY - PROJECTS IN THE PIPELINE 19
INDUSTRY DEVELOPMENT PROSPECTS IN THE COMPANY’S VIEW 20
THE COMPANY’S SALES POLICY IN 2009 21 PRESENTATION – PERFORMANCE 1ST HALF 2009
CHANGE IN ACCOUNTING POLICYCHANGE IN ACCOUNTING POLICY
3
By the end of 2008, the Group recognized revenues and expenses using the
“zero-profit-margin method” (IAS 11), after:
- actual revenues exceeded 50% for a given project, and
- actual expenses of the project exceed 40%.
In accordance with the new regulations, in force from 2009, the Group applies
IAS 18 to recognize revenues and expenses:
- revenues are included in the profit and loss account after an apartment is
transferred to its buyer under a notarial deed, with alternate options that include
revenue recognition after a building permit is received, the purchased apartment
is paid for in full and the apartment is officially accepted by the buyer.
PRESENTATION – PERFORMANCE 1ST HALF 2009
CHANGES IN ACCOUNTING POLICY – OUTCOMES
4
Changes in accounting policy – outcomes:
For particular projects, revenue and expense recognition (and thus gross profit
recognition) will be shifted in time
Operating result – depends on the phase of the project – will be recognized
after a given project is completed, i.e. after 18 – 24 months
PRESENTATION – PERFORMANCE 1ST HALF 2009
336,4
331,2
300,0
305,0
310,0
315,0
320,0
325,0
330,0
335,0
340,0
1st half 2008 1st half 2009
Sales revenue, PLN million:
23,7
26,9
22,0
23,0
24,0
25,0
26,0
27,0
1st half 2008 1st half 2009
Gross margin, %
PERFORMANCE IN THE 1ST HALF OF 2009PERFORMANCE IN THE 1ST HALF OF 2009
5
Slight decline in revenues from sales in the first half of 2009 by 1.6% compared to the corresponding period in the previous year
2008 data – restated to IAS 18
PRESENTATION – PERFORMANCE 1ST HALF 2009
50,1
69,1
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
1st half 2008 1st half 2009
Operating profit, PLN million:
35,0
49,4
0,0
10,0
20,0
30,0
40,0
50,0
I półrocze 2008 I półrocze 2009
Net profit, PLN million:
6
Dane za 2008 – po przekształceniu zgodnie z MSR 18
Operating profit rose by 37,7% in the 1st half of 2009 year compared to the corresponding period in the previous year
In addition, net profit in the 1st half of 2009 posted a 41,0% increase as compared with 1 st half of 2008
PRESENTATION – PERFORMANCE 1ST HALF 2009
PERFORMANCE IN THE 1ST HALF OF 2009PERFORMANCE IN THE 1ST HALF OF 2009
1 ST HALF OF 20091 ST HALF OF 2009 GROSS SALES PROFIT GROSS SALES PROFIT
The total gross sales profit in the 1 st half of 2009 came to PLN 89,2 million. The following projects contributed the main to this figure:
Osiedle Lazurowa, Warsaw - 37 %
Rezydencja na Skarpie, Warsaw - 17 %
Osiedle Leśne, Gdynia - 13 %
Osiedle Górczewska I, Warsaw - 10 %
Willa Konstancin, Konstancin - 9 %
Osada Wiślana, Warsaw - 5 %
Osiedle Centrum, Łódź - 5 %
7 PRESENTATION – PERFORMANCE 1ST HALF 2009
8
IMPLEMENTED PROJECTS IMPLEMENTED PROJECTS IN THE 1ST HALF OF 2009IN THE 1ST HALF OF 2009
In the first half of 2009, 5,197 units were being constructed of a total surface of more than 251,000 sq.m. (commercial and residential space)
PROJECT CITY / DISTRICTMARKET SEGMENT NO. OF
APARTMENTS / HOUSES
ESTIMATED USABLE APARTMENT FLOOR
SPACE, SQ. M
„Osiedle Lazurowa” Lazurowa Street Warsaw / Bemowo Standard apartments 669 33 416
„Górczewska Park” Górczewska Street Warsaw / Wola Luxury apartments 890 44 422
„Rezydencja Quatro” Łukowska StreetWarsaw / Praga
PołudnieLuxury apartments 243 14 006
„Pyry II” Ludwinowska Avenue Warsaw / Ursynów Apartments 24 1 632
„Osiedle Lewandów I” Lewandów Street Warsaw / Białołęka Standard apartments 631 26 827
„Osiedle Lewandów II” Lewandów
StreetWarsaw / Białołęka Standard apartments 1 274 54 364
„Osiedle Bursztynowe” Korkowa Street Warsaw / Wawer Standard apartments 328 17 594
„Wiślana Aleja” Odkryta Street Warsaw / Białołęka Standard apartments 200 9 770
„Osada Wiślana” Marcina z
Wrocimowic StreetWarsaw / Białołęka Standard apartments 404 19 891
„Lazurowe Ustronie” I stage Ożarów Mazowiecki Standard apartments 376 17 902
„Osiedle Victoria Park”, Russia Kołomna / Russia Standard apartments 158 11 545
PRESENTATION – PERFORMANCE 1ST HALF 2009
9
ENDED INVESTMENTS IN THE 1 ST HALF OF 2009 ENDED INVESTMENTS IN THE 1 ST HALF OF 2009
In the first half of 2009, the following investment projects were completed:
PROJECT CITY / DISTRICTMARKET SEGMENT NO. OF
APARTMENTS / HOUSES
ESTIMATED USABLE APARTMENT FLOOR
SPACE, SQ. M
„Osiedle Lazurowa” Lazurowa Street Warsaw / Bemowo Standard apartments 669 33 416
„Górczewska Park” Górczewska Street Warsaw / Wola Luxury apartments 890 44 422
„Rezydencja Quatro” Łukowska StreetWarsaw / Praga
PołudnieLuxury apartments 243 14 006
„Osada Wiślana” Marcina z
Wrocimowic Street I, II stageWarsaw / Białołęka Standard apartments 276 13 962
PRESENTATION – PERFORMANCE 1ST HALF 2009
10
STRATEGY OF STRATEGY OF J.W. CONSTRUCTION HOLDING S.A.J.W. CONSTRUCTION HOLDING S.A.
Regardless of circumstances, the Company diversifies the Group’s risks by:
Expanding non-developer operations of affiliated companies – general construction, designing, construction prefab manufacturing
Enhancing the product range by office and commercial space
Continuing started housing projects – none of the projects in progress has been stopped
Providing a differentiated commercial offer – including apartments ready to take
Continuing preparations of new projects (documentation and building permit phase)
PRESENTATION – PERFORMANCE 1ST HALF 2009
11
STRATEGY - STRATEGY - DIVERSIFYING OPERATIONAL RISK OF THE GROUPDIVERSIFYING OPERATIONAL RISK OF THE GROUP
J.W. Construction S.A. – focus: construction and assembly work
Strengths:
It may implement projects for unaffiliated clients (general construction, electrical engineering, water & sewage, and road construction work)
Experienced engineering and technical staff, own resources for project implementation
Substantial construction and transportation equipment resources
Development of Affiliated Companies – Strength and Capabilities
PRESENTATION – PERFORMANCE 1ST HALF 2009
12
JW Projekt Sp. z o.o. – focus: architecture and design.
It may prepare projects for unaffiliated clients (recently it has been invited by National Airports to take part in the contest for a luxury hotel in the vicinity of the Okęcie Airport)
Skilled and experienced experts in various designing units dedicated to: architecture, design engineering, water & sewage and electrical systems
Development of Affiliated Companies – Strength and Capabilities
STRATEGY - STRATEGY - DIVERSIFYING OPERATIONAL RISK OF THE GROUPDIVERSIFYING OPERATIONAL RISK OF THE GROUP
PRESENTATION – PERFORMANCE 1ST HALF 2009
13
JWCH Produkcja Budowlana Sp. z o.o. – focus: construction prefab
manufacturing – own plant with an advanced production line
Shorter deadlines
Prefabs may be offered to unaffiliated clients
Target – reduced expenditures
Development of Affiliated Companies – Strength and Capabilities
STRATEGY - STRATEGY - DIVERSIFYING OPERATIONAL RISK OF THE GROUPDIVERSIFYING OPERATIONAL RISK OF THE GROUP
PRESENTATION – PERFORMANCE 1ST HALF 2009
The Company is prepared to start a commercialization project for office buildings,
hence project implementation may commence soon.
Office and Commercial Space
Office Building – Jerozolimskie PointWarszawa, Badylarska / Al. Jerozolimskie Streets
It is a modern 5-storey B+ class office
building (with option to upgrade to A class
standard), designed to the highest
standards and care for work comfort.
Useable space: 4,157 sq. m.
14
STRATEGY - STRATEGY - DIVERSIFYING OPERATIONAL RISK OF THE GROUPDIVERSIFYING OPERATIONAL RISK OF THE GROUP
PRESENTATION – PERFORMANCE 1ST HALF 2009
Office Building - Nowa DanaSzczecin, Wyzwolenia Avenue / Odzieżowa Street
It is a technologically advanced 22-storey A class office
building.
- Useable space: 25,324 sq. m.
- Office space: 20,877 sq. m.
- Commercial space: 4,447 sq. m.
A hotel with catering establishments and shops
Warszawa, PileckiegoStreet
Construction design in progress. Planned
space: 16,838 sq. m.
15
STRATEGY - STRATEGY - DIVERSIFYING OPERATIONAL RISK OF THE GROUPDIVERSIFYING OPERATIONAL RISK OF THE GROUP
Office and Commercial Space
PRESENTATION – PERFORMANCE 1ST HALF 2009
At present, J.W. Construction Holding Group has
5 two- and three-star hotels in: Zegrze, Stryków,
Cieszyn, Tarnów Podgórny and Święta Lipka.
Hotels focus on institutional clients (conferences,
training sessions, seminars), but do not ignore
individuals.
Hotel Operations
16
STRATEGY - STRATEGY - DIVERSIFYING OPERATIONAL RISK OF THE GROUPDIVERSIFYING OPERATIONAL RISK OF THE GROUP
PRESENTATION – PERFORMANCE 1ST HALF 2009
In 2005, the Company purchased the “Czarny
Potok” Resort in Krynica. Now, it is being
expanded and upgraded to the “Resort & SPA”
standard. The goal is to convert it into a four-star
hotel with appropriate catering and conference
facilities plus a five-star SPA/wellness centre. The
building houses a lobby with reception desk, a
restaurant for 400 guests and a multi-purpose
conference room.
17
STRATEGY - STRATEGY - DIVERSIFYING OPERATIONAL RISK OF THE GROUPDIVERSIFYING OPERATIONAL RISK OF THE GROUP
Hotel Operations
PRESENTATION – PERFORMANCE 1ST HALF 2009
The Company has about 360
available apartments, ready to
move in, in already completed
projects
18
Osiedle Uroczysko, KatowiceOsiedle Leśne, Gdynia
Willa Konstancin, Konstancin
Górczewska Park, Warsaw Osiedle Lazurowa, Warsaw
Ludwinowska Aleja, WarsawOsiedle Centrum, Łódź
Rezydencja Quatro, Warsaw
STRATEGY- STRATEGY- APARTMENTS READY TO MOVE INAPARTMENTS READY TO MOVE IN
PRESENTATION – PERFORMANCE 1ST HALF 2009
19
PROJECT CITY / DISTRICTMARKET SEGMENT NO. OF
APARTMENTS / HOUSES
ESTIMATED USABLE APARTMENT FLOOR
SPACE, SQ. M
Mokotów, Antoniewska Street Warsaw / Mokotów Standard apartments 200 13 000
Światowida Warsaw / Białołęka Standard apartments 196 10 140
Zielona Dolina I, II Zdziarska Street Warsaw / Białołęka Standard apartments 1 480 72 550
Lewandów Park III, Lewandów Street Warsaw / Białołęka Standard apartments 787 33 179
Szczecin, Wyzwolenia Avenue Szczecin Luxury apartments/ services - 25 324
Badylarska – Office Building Warsaw Services - 4 157
Pileckiego – Offices/Hotel Warsaw Services/ Hotel services - 16 838
Berensona Warsaw / Białołęka Standard apartments 170 9 350
STRATEGY- STRATEGY- PROJECTS IN THE PIPELINEPROJECTS IN THE PIPELINE
Regardless of market circumstances, works related to preparation of further projects are carried out based on the existing “land bank”, including:
Drawing up documents, e.g. design documentation
Applying for building permits.
The above actions will allow smooth construction commencement in the future.
PRESENTATION – PERFORMANCE 1ST HALF 2009
20
INDUSTRY DEVELOPMENT PROSPECTSIN THE COMPANY’S VIEW
Anticipated reduction of interest rates for loans denominated in PLN with an increased activity in the mortgage loans market
Irrespective of stagnation in the housing market, already ng for months and caused by the lack of financing sources, the estimated deficit still exceeds 1.5 million apartments (according to the Central Statistical Office (GUS) data)
There is an active group of customers in the real estate market who were born during the 1980s baby boom and whose housing needs still have not been met
Supply of new apartments will be probably decreasing, starting in 2010, as developers have stopped many projects and postponed start-ups, which is likely to increase both demand and prices
Stable pricing situation in the construction materials market
In the longer term, demand will be boosted again from 2010 onwards due to the Euro 2012 effect and Poland’s probable entry into the euro area
PRESENTATION – PERFORMANCE 1ST HALF 2009
21
THE COMPANY’S SALES POLICY IN 2009
Offer of financing programmes for Customers
Packages offering special conditions, dedicated to employees of institutions co-operating with J.W. Construction
Excellent housing offer, including instant-delivery opportunity buys
Offer of apartments meeting the requirements of the government programme “Rodzina na swoim” (Family on its own)
Interior finishing programmes for Customers
Implementation of alternative sales channels
Continuous marketing activities
Flexible approaches to clients – negotiable prices depending on payment amounts and schedules
PRESENTATION – PERFORMANCE 1ST HALF 2009
INVESTOR RELATIONS OFFICE:Małgorzata Szwarc-Sroka
Head of Financial Liquidity Managementand Head of the Investor Relations Office
Phone: +48 022 771 77 85 / +48 0 22 771 78 10or +48 022 771 75 10
e-mail: [email protected]
