Nevertheless, each of the ten largest companies in this business remained profitable.
Hidroconstructia was again the number one Romanian constructor, with about EUR236 million in revenue, according to the information on the Finance Ministry’s website. The company, which started out as a state-run business established in 1961, is now held by management and employees.
Bacau-based businessman Dorinel Umbrarescu has two companies in the ranking, Spedition UMB and Tehnostrade, with about EUR322 million in revenue together, up about 25% on 2010. Umbrarescu got the second and fourth place in the builders’ ranking, but if the two companies were counted as one in terms or revenue, he would be the undisputed leader.
Moreover, the businessman also had the highest profit margins last year, over 20%. The cumulated profit of Spedition UMB and Tehnostrade stood at EUR67.5 million, enough to build about 10 kilometers of highway at Romanian pricing standards.
However, in most cases, the net profits of Romania builders went down compared with 2010. How can this be, considering they had been posting higher and higher income up until 2011?
“The economy is getting worse by the day and competition is fiercer. You work harder to get the same revenue and profits are dwindling,” says Florea Diaconu, the businessman who controls Bucharest-based Delta ACM ’93. His company posted some EUR12 million profit last year, down to less than half of the 2010 figure, even though revenue was slightly up.
Romstrade retained its middle position in the ranking compiled by ZF, with about EUR127 million in revenue, but profit was down by more than 60% to less than EUR3 million. However, Romstrade budgeted 140% growth for its business in 2012, and revenue should reach almost EUR290 million, according to the information recently provided by the company.
The Romanian heavyweights in the construction industry generally managed to increase their revenue slightly last year, driven by the new infrastructure works that started in 2011.
There are, however, cases when business was down by as much as 30%, such as Confort Timisoara, owned by Georgica Cornu. He had previously told ZF that the revenue decline was due to work performed but not paid in due time.
The surprise new entry in the top ten of Romanian builders is Bucharest-based Straco Grup, which posted almost 70% increase in revenue, while profit doubled to EUR1 million. This is the first time the construction company held by brothers Alexandru and Traian Horpos has made it into a ranking of the top ten Romanian-held builders.
The top ten companies are mostly the same as last year, although some changed positions.
Whereas the cumulated revenue of the top ten construction companies remained about the same as in 2010, while the net profit fell, the number of employees was 16% higher, of more than 18,000 people. This can be explained by the resumption of some infrastructure works, which made construction companies hire new people.
The construction market amounted to some EUR9.3 billion last year, down from EUR9.7 billion the year before, according to the estimates of the Romanian Association of Construction Contractors (ARACO).
(English version by Loredana Fratila-Cristescu)