Economic Management of the Company
| Indicator | 2003 | 2004 | 2005 |
|---|---|---|---|
| Product | 8 391,3 | 8 084,0 | 8 820,1 |
| Profit/loss before tax | 130.8 | 146.9 | 255.0 |
| Profit/loss – current year | 67.9 | 84.5 | 189.2 |
| ROA – return on assets | 1,78% | 1,91% | 4,00% |
| ROE – return on equity | 7,96% | 9,08% | 17,04% |
| ROS – return on sales | 0,81% | 1,05% | 2,15% |
The figures are stated in million CZK, for comparison according to Czech accounting standards.
The trend of production growth that has been developed over a long-term period since 1993 when it was started up was finally supplemented with adequate growth in profit. Here, the influence of the majority shareholder, the OHL Spanish construction group, on the increasing quality of the internal management system consistently preventing internal loss occurrence needs to be highlighted.
Several “records were made in the corporate history” with respect to the profit/loss for 2005. The strongest generation of product, value added, profit before taxes as well as total income for current year; the equity exceeded the magic threshold of one billion CZK for the first time; the balance between receivables and liabilities on a very good level; sufficient working capital.
The internal structure of the balance sheet has improved as the balance between non-current assets and equity, that was always troublesome, dropped down from 1.46 to 1.25. The bond emission brought in necessary sources to boost working capital. The balance sum is on the level corresponding to the trends of turnover increasing.
The product of the company has increased by CZK 736.076 thousand, i.e. by 9.1%. Operating profit/loss grew by CZK 105.915 thousand, which is 50.5 %. The total profit/loss before tax grew by CZK 108.140, i.e. by 73.6 %. The total profit/loss for the current period doubled – increase by 104.708, i.e. 123.9%.
Return on assets (ROA) increased from 1.91 % to 4.00 %. Return on equity (ROE) growth from 9.08 % to 17.04 %. Return on sales (ROS) showed increase from 1.05% to 2.15 %.
Expected Development in 2006
In 2005, the company registered a very significant improvement of its profit. Because the potential of the basic focus on railway construction – the railway corridor construction in Moravia – has been used up, the company had to look for new markets in advance. This became apparent already in 2005, when the company increased the volume of works in the railway segment abroad threefold.
In 2006, yet another, this time milder, increase in profit is expected. The reason why the increase is expected to be milder is the need to carry out works abroad, which is much more cost-intensive than works in the Czech Republic. Its role also plays the growth of product in the surface construction segment of the market which is more cost-intensive.
Trends started up in 2003 will continue as regards the balance sheet. The strongest emphasis will be put on securing sufficient mass of working capital and decreasing the contradiction between long-term assets and equity.
Furthermore, profit-ratios of ROA and EBIT on assets will grow due to the optimization of balance sum and the growth of the total profit. The profit-ratio of equity shows decrease because the equity grows significantly; the indicator of the profit-ratio of revenues poses the biggest challenge for the Board of Directors of the company set by the majority shareholder – growth in working capital.