Building contractor BAM is blaming challenges associated with its national children’s hospital contract as the main reason for recording a pretax loss of €16.9 million last year.
According to new accounts for BAM Contractors Ltd, the group went into the red for 2020 after its revenues slumped by €127.7 million, or 21.7 per cent, from €588.5 million to €460.8 million.
The €16.9 million pretax loss for the 12 months to the end of December last follows a pretax profit of €17.22 million for 2019 – a negative swing of €34.1 million.
In their business review, the directors said the hospital remained “a significant project in our current portfolio”.
They said the hospital “continues to present a number of challenges to the group from both an operational and financial perspective, including those arising from the impact of the Covid-19 pandemic”. These challenges are “the major contributing factors to the overall loss being reported by the group for this financial year.”
In April, BAM lodged High Court proceedings against the hospital's development board in a €20 million costs dispute concerning the project.
The final sum to be spent on the hospital is expected to be about €1.7 billion, with construction costs set to make up €1.4 billion of that.
The group has been hit by two Government-enforced Covid-19 stoppages since March of last year, and the directors said that with the adverse impacts of the pandemic, “our overall performance across the property, civil and building sectors suffered considerably”.
“These difficult trading conditions along with negative results on some large public projects have contributed to the poor results for the group in 2020”.
However, the directors said the “order book at year end is strong, indicating an improved level of activity for 2021”.
Last year the group’s cash funds reduced from €99.9 million to €84.8 million. The loss takes account of non-cash depreciation costs of €5.4 million.
The group recorded a post-tax loss of €15.3 million after recording a corporate tax credit of €1.57 million.
Numbers employed by BAM last year increased from 763 to 773 as staff costs fell from €59.59 million to €57.92 million.
Directors’ pay, including pension contributions, fell from €1 million to €820,000.
At the end of December, the group’s shareholder funds totalled €74.36 million.