“The revenue has been going up because of the office space construction, which generates 65%-70% of our business. Another reason for the revenue growth in 2012 was the completion of the UniCredit Tower office building in northern Bucharest, where we worked as both developer and general contractor,” said Sorin Greu, general manager of Bog’Art.
The builder expects its revenues will increase to EUR90 million in 2013, after having won a number of contracts mainly in Bucharest in the second half of 2012.
The contracts won last year include the Floreasca Park business park developed by Portland Trust, Green Gate developed by Czech Republic’s S Group, and two apartment buildings in the Edenia and Optima residential complexes of developer Adama.
Bog’Art posted about RON3 million net profit last year, and expects it to increase to RON10.9 million in 2013.
The construction sector saw a significant decline of 30% to 40% after the onset of the crisis. Greu says the office space, residential, retail space and industrial facility construction sector is in a more difficult position than it was at the start of the crisis because financing for real estate development is difficult to get. Moreover, legislative instability and tax unpredictability caused distrust among investors.
“One cannot talk about a positive development of the construction market yet, not until 2014 at least. The rebound will not be fast,” Greu said.
As 2013 does not appear to be a year of many construction project tenders, Bog’Art is looking at new markets to tap into. It already has a branch in Leipzig, Germany, but does not have any contract abroad for the time being.
“Bog’Art’s goal for 2013 is to enter foreign markets such as Russia and Belarus, as well as Saudi Arabia, Iraq, Libya, Morocco and Algeria (…). These are markets with a high potential for the construction business.”
(English version by Loredana Fratila-Cristescu)