Industry: Potential in energy

Steel construction and assembly company Mostostal-Energomontaż, a subsidiary of bourse-listed Ropczyce, has earmarked zł.50 million for investments in the development of steel-construction production and services. The investments will be carried out over the next few years.

However, the company believes that more funds may be necessary and has mooted a possible IPO as a means of obtaining them. "We are looking for funds for development ... One of the sources of capital being considered is the bourse," said the president of Mostostal-Energomontaż, Iwona Dybał.

The company is making the investments in anticipation of higher demand, driven by an expected boom in modernization investments in the energy sector. This year alone it will invest a total of zł.25 million, spending zł.20 million to launch a production plant in Gliwice and zł.5 million to upgrade its storage facilities.

"The expenditures ... may reach into the tens of billions of złoty. We want to take advantage of [current economic] prosperity," Dybał said.

The potential to boost revenue by seeking contracts in the energy sector is strong, as this branch has long been under-invested, said Bogusław TaŸbirek, chief analyst of brokerage DM Polonia Net. Still, the attractiveness of energy-sector contracts depends on Mostostal's position in the market, he added. Also, if the company is to enter the bourse in the near future, it needs to make sure it is not overvalued, TaŸbirek said.

Although Mostostal plans to court the energy sector, it also wants to diversify its revenue base, spreading it across trade, production and services in order to obtain higher margins and decrease risks related to market fluctuation. The firm is considering acquisitions in the production segment.

Mostostal-Energomontaż was formed in March after the merger of Mostostal Kraków Firma Handlowa, Mostostal Kraków Produkcja and Energomontaż-Zachód.