Although the beginning of the year only came with pessimistic forecasts (many companies in this sector expected declines of over 10%) towards the end of 2011 things have started to budge in the construction sector, which creates growth premises for next year, as well.
Engineering design companies play a central role in any construction work, whether they are involved in building highways, hydro-power stations or industrial facilities, because they provide the technical solutions and set the tone for any step that constructors may take. Although design companies don’t boast impressive turnovers, they are a real gauge of the construction market, with the trend of their turnover indicating a rebound or a decline of the sector.
The top ten players in the engineering design industry posted cumulated turnovers of over 350 million lei (around EUR80.5 million) last year, and an average profit margin of 10.2%, according to IBC Focus, which specializes in aggregating data in the construction and business sector.
According to the 2010 ranking, the company boasting the highest revenues operates on the segment of hydro-power station construction – the Institute for Hydro-Energy Studies and Design (ISPH), with turnover of RON53.5 million (EUR12.3 million), slightly down compared with the previous year.
The company was set up back in 1949 and privatized after the 1989 revolution. It was involved in the construction of many dams and hydro-power stations in Romania.
The company had a profit margin of around 17.5% last year. It posted the second-largest net profit among the top ten engineering design companies on the local market.
No. 2 was Search Corporation, controlled by businessman Michael Stanciu, which mainly has contracts involving road infrastructure projects. With a turnover of nearly RON45 million (EUR10.3 million) and a profit of RON1 million (EUR0.23 million) last year, the company mainly focuses on highway projects in Romania, so, considering that a large number of such projects have been auctioned off this year, it could significantly boost its 2011 turnover.
After the company saw its 2010 turnover down by around 25% on the year, the company expects a 15% increase in 2011.
Industrial design companies performed well
The third-ranking company, Europroiect Constanta, recorded a spectacular rise last year, seeing its turnover up 350%, to over RON43 million (EUR10 million) for advisory services at a time when the construction market saw a steady decline. The company, based in Constanta, is controlled by two Greeks, Antionios Gioxas and Ioannis Skantzikas.
Also involved in road infrastructure and in energy sector constructions are Tractebel Engineering, at no.4, and Iptana, at no. 5. Tractebel Engineering, part of French group GDF Suez, posted turnover of RON39.3 million (EUR9 million), while Iptana posted turnover of RON36.7 million (EUR8.4 million) last year, according to IBC Focus.
Hope for 2011
Since 2011 was somewhat better than the preceding year, at least in terms of road infrastructure, with works worth several billion euros being kicked off, engineering design firms are expected to feature with much higher businesses in next year’s ranking. (EUR1=RON4.3429)
(English version by Daniela Stoican)