The strength of traditional business and the increase of the property sector, foundations for the year 2005.
The good performance of the group has favoured the incorporation of 330 people into the workforce, which now amounts to 1,450 employees.
Malaga, 29th of March, 2006.- Grupo SANDO ended the year 2005 with a 40% growth in its turnover on 2004. This increase, the highest in percentage terms this decade, allowed total sales to go over the €500 million barrier, reaching 520 million. In this way, the company takes one more step towards its consolidation among the main construction companies of the Spanish market.
Over the last four years, Grupo SANDO has doubled its turnover, which in 2001 was of €263 million. This progress has been based on the good performance of the diversification strategy adopted, which is reflected in the sustained growth of each of the operating divisions. As regards the year 2005, four out of the five divisions increased their volume significantly.
There are two circumstances that stand out in the company’s progress in 2005. Firstly, the notable growth of traditional business in the construction division (civil engineering works) which, after the slowdown registered in the previous year, increased its turnover by 39%, going from €198.2 million to €274.9 million, keeping its relative weight as the Group’s major activity with 52.9% of the total. Secondly, the extraordinary 110% growth of the property sector, which reached the figure of €102.1 million against the 48.9 million of the year 2004. This area has become the third in terms of sales revenues, increasing its relative weight by six points to 19%.
The area of Materials also increased its turnover by 15%, although it lost five points in its relative weight, which was 25.1%. As regards the most recently created areas and, therefore, the areas with the lowest relative weight, Environment increased its turnover by 14%, while Concessions’ decreased slightly, going down to 0.4%. This is to be expected in the concessions business, which is planned for the medium-to-long term, with the first years being purely for investment.
RESULTS AND BALANCE
Operating earnings were €47.1 million, practically the same as in the previous year (46.4). This figure is explained by the modification of accounting criteria, which enters the result of each job only when this is finished and cleared, and because the materials area has been affected by relevant events: the increase in the price of oil and cement and the problems that interrupted the activity of the quarries in Malaga in the last part of the year.
The Group’s balance finished with assets to the value of €939 million, with an increase of almost 200 million as regards investment. The company’s own funds rise to €149 million, which provides a high degree of financial solvency.
Grupo SANDO and its constituents were the successful bidder for 2.44% of the jobs put out to tender by the Ministry of Public Works in 2005, which places it in second place in the ANCI ranking of companies, confirming its exceptional position in the civil engineering works market. Likewise, it has increased the average amount of work contracted, which reflects its ability to undertake ever larger-scale jobs.
Among the most important jobs contracted are the Siete Aguas-Buñol stretch of the new high-speed rail access to eastern Spain (ADIF), the new Metro depot in Vallecas (Mintra) and the Santa Olalla-edge of Badajoz province stretch of the Ruta de la Plata. The work done covers practically the whole of Spain.
RELEVANT FACTS
With the aim of being able to compete in Railway work, Grupo Sando, together with two other companies from Catalonia and Valencia, has created Iberovías, with a €30-million programme of investment in special machinery.
As regards the property sector, the property portfolio at the end of the year was 2.4 million square metres of floor space, distributed in Andalusia, Murcia, Madrid and Toledo. In 2005, 534 homes were started, against the 181of the previous year. November saw the creation of the subsidiary Sando Inmobiliaria Polska, located in the Warsaw Financial Centre. This firm, which has land acquisition processes at a very advanced stage, will also be the bridgehead to start other activities in Eastern Europe.
In the Environment division, it is necessary to highlight the beginning of Waste collection activity by means of a contract with the municipality of Velez-Malaga. This line will be promoted over the next few months.
Finally, in Concessions there are already 10 projects being managed; only two car parks are currently in operation. Throughout the year, the portfolio has increased with three ventures: a car park in Rincon de la Victoria, the Velez Malaga tram and Tajo Hospital in Aranjuez.
As regards human resources, defined by the Group as strategic, it is worth noting that the workforce at the end of the year was made up of 1,450 employees with an increase of 330 people. The investment in training has increased spectacularly, by 600%. 400 employees have completed more than 15,000 hours of training.
According to the estimates deriving from the methods of the specialised consultancy companies, the Group’s activities generated more than 21,000 indirect jobs in 2005.
As a strategy, Grupo SANDO maintains sectoral and geographical diversification together with a suitable approach to classic values, prevention and safety, respect for the environment and an advance in quality, together with demanding self-regulation and continuous advances in achieving the corresponding AENOR certificates.
That is why the path of research, development and innovation has been chosen. On this subject, participation in the Andalusian Technological Corporation should be highlighted; this will allow progress in terms of productivity and competitiveness.
SANDO also advances with its Corporate Social Responsibility activities. The shareholders and managers understand that part of the earnings must be reinvested in society in general and in the workers in particular, in such a way that the budgets for these activities are continuously increasing.
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