FEERUM after 2018 – record contracts and nearly 34 percent. increase in sales revenues

The company FEERUM JSC., a leading producer of comprehensive grain elevators in Poland, also operating on export markets, published the results for 2018. Revenues increased by nearly 34%. and reached a record-breaking level in the Company’s history of over 128 million PLN. The consolidated net profit amounted to 7,5 million PLN, i.e. it increased by nearly 68%. Operating profit amounted to 6,4 million PLN.

The new contracts signed in 2018, the timely execution of the contract on the Tanzanian market and the launch of subsidies for the modernization of agriculture in Poland allow a positive assessment of the prospects for subsequent periods.

The current order portfolio is approximately 292,5 million PLN and includes 20 contracts. In turn, the potential portfolio of clients waiting for EU funding and holding a building permit is at the level of approx. 34,2 million PLN. The portfolio with the deadline for completion in the years 2020 – 2021 includes projects with a total value of over 110 million PLN.

The observed increases in the Group’s revenues are the result of the timely implementation of the contract in Tanzania and the increase in the pace of settlement of applications for co-financing of investments under EU programs. The prospects for the next periods are very good. Taking into account the current order portfolio and our commitment to further projects, including on the Ukrainian market, one can expect a further improvement in the results – said Daniel Janusz, president of the board of FEERUM JSC.

In 2018, export was responsible for 70,4 pct. revenues. The value of foreign sales in this period amounted to 90,7 million PLN. The main export market was Tanzania (63,3 million PLN). Lithuania came next (almost 14 million PLN), and Ukraine’s third trading partner was Ukraine (11,6 million PLN). FEERUM also carried out sales, among others to Germany, Romania and other countries. The Group intends to develop its operations on new, prospective markets focused on agricultural production and its processing.

The implementation of the Tanzania contract is proceeding as planned. The production of machinery and equipment has already been completed, and the last deliveries to Africa are being completed. Foundation works are well advanced and assembly of steel structures has started. According to the original assumption, work is carried out simultaneously in each of the five locations. Revenues from this contract will be part of the results in 2019.

In accordance with the adopted strategy of the Company, the first two years of operation in Tanzania have initiated the expansion of FEERUM in Africa. The FEERUM branch in Tanzania acquired all the licenses and permits necessary to carry out the silo construction project at that time, and obtained a VAT exemption for suppliers. Cooperation with Tanzanian construction companies, design offices and other subcontractors for each of the five ongoing construction projects has been established and strengthened.

The signing of contracts with the Ukrainian company Epicentr K LLC at the end of 2018 for a total amount of 50 million EUR has triggered further important events at FEERUM. After obtaining in December 2018 the final and binding decision of Export Credit Insurance Corporation (KUKE) on insurance of receivables under contracts, the Company from the beginning of 2019 started to perform the contract.We believe that a high quality product combined with financing is the key to success, not only in Ukraine, but also in Africa and other countries around the world. Before signing contracts with Epicentr K LLC, we knew about the possibilities offered by, among others, government program “Financial Support for Exports”. However, in the last few months we have gained our own experience, which makes it easier for us to conduct business talks with subsequent clients – emphasizes Daniel Janusz, president of the Board of FEERUM JSC.