Outlooks for development
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Development prospects for the next financial year

The Production Segment looks forward to the year 2018 with a lot of hope, considering planned investments in the domestic market in such sectors of economy as: power generation, primary distribution, mining, railway traction and municipal electric transport, in order to maximize the revenue and margin earned by the Segment.

Further development and promotion of high voltage and low voltage switchgear, Optima 145 and Optima 24 (the company is the only domestic manufacturer of such solutions) is planned for the year 2018. As the investors prefer the solutions involving SF6 insulation, the number of tenderers in the market has substantially dropped, what should have positive impact on earned margins.

Owing to the marketing activity in the Eastern markets, in 2017 the Group reached new customers and offered its products to them. The products aroused interest and created opportunities for active participation in newly designed facilities, with our products and installation services. In 2018 the Group will strengthen its position of the supplier of high quality goods and services, ready to face the toughest challenges that our current and future customers would present us with. The efforts will be made to acquire new customers. The Company will take part in major trade fairs and promotional events held in the Eastern and European markets. Development of our offer will be continued; we will also carry on the procedures of obtaining relevant certificates for conformity with standards and requirements of customers in these markets. Every other effort will be made to increase our market share in the scope of our business activity.

In the second half of 2018 the market of Saudi Arabia is expected to stage considerable recovery in the power and crude oil sector, after granting substantial funds from the state budget and started privatization processes in corporations of key importance for the country, such as SEC and SAUDI ARAMCO. Due to the specific nature of the projects and their long time for completion, the effects will be visible only in the subsequent years. Therefore the Company’s presence in the market is important and it should result in participation in future projects.

As far as the European market is concerned, the activity is targeted at being awarded first projects and references. The Company is going to present its products at the fairs in Finland and Germany. It is also going to develop cooperation with local partners.

Prospects for development of the Project Execution Segment are principally based on the external, mainly regulatory factors. The act of 8 December 2107 on capacity market, as well as the anticipated launch of an auction system which may induce the market to build new generating facilities, are expected to improve the market situation. Market observation indicates that investors are preparing further concepts of extension of their facilities, a real premise which allows for an assumption of a boost in investments in 2018. Growing requirements in respect of references become a high barrier for bidding in tenders. A chance for filling an order portfolio is seen in active work and development in export markets with a potential for development of new and modernization of the existing sources and electrical stations. Potential of the Segment can be used for performance of projects in such countries as Ukraine (electrical stations and biomass facilities) and Belarus (renewable sources of energy, also biomass facilities).

Decisions about performing contracts in these countries will depend on readiness of the organization to meet the legal, tax, logistic requirements and to secure various risks resulting from the present situation in these regions. The company intends to take the effort of bidding in tenders and for projects funded by the international financial institutions.

Business activity in the Automation Segment of the Group is carried out by the subsidiary ENERGOTEST sp. z o.o.

Power automation is still a relatively attractive market, with the ongoing entry barriers for new players, yielding returns. It will be possible to maintain a strong position by offering a wider range of own products. Offering performance of a comprehensive package of services seems to become a necessity. In the nearest future, the most significant playground in respect of products manufactured by ENERGOTEST sp. z o.o. will be the market of auxiliary relays which provide access to broadly understood market of prefabrication of auxiliary circuit cubicles. Taking into account advantages of the synergy effect, it seems appropriate to supplement the product portfolio with products dedicated for the same customer group (power plants) and which enable building an offer into a bigger, coherent package. In 2018 ENERGOTEST sp. z o.o. will supplement its product portfolio with EB Protect protection unit to be sold principally within the Group, to the parent company ELEKTROBUDOWA SA. The company will also continue works on ET-DCS controller with its own synchronizer.

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