The decision has to do with the dwindling number of new construction projects during the crisis.
“We decided in 2010 to cease operations in Romania due to the lack of new projects and related agreements caused by the difficult economic environment that affected, since 2009 onwards, the construction market in this country,” said Antonio Capihna, a representative of the Portuguese-held group. “Between decision and final shutdown it takes time to conclude all the ongoing business. Probably that will finally happen in 2013.”
Mota-Engil has been involved in a number of projects during its presence in Romania such as the Pipera-Tunari overpass, Lake View office building developed by AIG/Lincoln and Dinu Patriciu Global Services and the residential complex Doamna Ghica Plaza (called Romfelt Plaza at first), developed Romfelt Real Estate in Bucharest.
It also did foundation works for Nusco Tower office building, of Italy’s Nusco group, and the office space project Glass House on the Bucharest-Ploiesti Road.
The local construction sector has been affected by the decline in the number of new projects, and especially of those started by private entrepreneurs, as few investors continued to spend money on new residential, office or industrial projects.
On the other hand, the infrastructure segment witnessed an increase because of the governmental investments in highways and railways. Such investments slowed down in 2012, as EU funding used to pay for them was halted for a while and the government decided to cut the Transport Ministry budget.
After cumulated decline of about 40% in 2009 and 2010, the construction sector decline slowed down last year. The sector stood at about EUR9.3 billion in 2011, down from EUR9.7 billion in 2010 and from EUR15.3 billion in 2008, according to the construction entrepreneur association ARACO.
According to the Finance Ministry, the revenue of the company registered as Mota-Engil, Engenharia e Construcao S.A. Portugalia – Sucursala Romania fell from a high of 185 million lei (EUR41 million) to less than RON0.8 million in 2011. The company had 90 employees in 2008 and only 7 in 2011. The local subsidiary was never profitable according to the Finance Ministry data.
“As a general contractor the number of employees was never significant but considering the abrupt activity reduction in Romania since 2009, we had unfortunately to constantly decrease the number of employees being a fact that today there are no projects running in Romania,” Capinha said.
The intention to leave the Romanian market has already affected the financial results of the Portuguese group. The closing of the Romanian operations had a EUR5 million impact on the group’s EBITDA in the third quarter, according to its nine-month report.
Mota-Engil is among the largest builders in Europe, with about EUR2.2 billion revenue and EUR71 million net profit last year. The group, which also has operations in Africa and South America, decided to focus its Central and Eastern European business on Poland, according to its nine-month report.
(English version by Loredana Fratila-Cristescu)