Weaker foundations

 Residential developer JW Construction last week announced its Q3 financial results. The company recorded net revenues of almost zł.160 million, as compared to zł.130 million last year, while its net profit amounted to over zł.13 million, a 26-percent y/y decrease. Altogether in the first three quarters of 2008, the developer saw net revenues of zł.545 million and a net profit of zł.64 million. JW Construction also expects to make a profit in the last quarter of 2008.

The announcement of results came just days after the developer scrapped its previous financial forecast for 2008, which envisioned net revenues of approximately zł.820 million and a net profit of some zł.150 million. Józef Wojciechowski, the firm's main shareholder and head of the supervisory board, later said the company would nonetheless see a full-year profit, although he conceded that there was lower housing demand, for which new stricter mortgage granting regulations were partially to be blamed.

"[The regulator] gave a signal for which the majority of our banks, especially those with foreign capital, were waiting," Wojciechowski told TVN CNBC Biznes, referring to the banking regulator's call for a moratorium of foreign-currency denominated loans. "If nothing changes in the banking system, we will not be able to sell apartments for cash," he added.

Ząbki-based JW Construction is the largest residential developer in Poland. The company is present in cities including Warsaw, Łódź, Gdynia and Katowice and has already completed or is currently realizing 20,000 apartments and 350 single-family houses. The developer is also planning to construct approximately 6,500 apartments in the next few years. JW Construction has been listed on the Warsaw Stock Exchange since June 2007.