The pendulum swings - the 2009 D&Ri100
By Lindsay Gale15 April 2009
As we are all too well aware, the current economic conditions are not favourable, and this year's D&Ri100 listing reflects this fact. Lindsay Gale reports on a troubled year for the industry.
For the first time since I took on the role of editor of this magazine, this year's D&Ri100 total shows a decline on the comparable total from last year. This clearly indicates that the demolition sector is not immune from the effects of the credit crunch.
Last year, the D&Ri 100 listing indicate substantive growth over the preceding year, with the total revenue reported as being 31% up at US$4,838.5 million. Unfortunately I cannot say the same for 2008 revenues against 2007. The 2008 figure is actually down by 4.4%, at US$4,625.4 million.
While this is not a desirable result, there is one positive in that while revenues are down in total, I feel it reasonable to point out that other sectors of the construction industry have fared far worse than this and a downturn of just this magnitude on what was a boom year in 2007 for the industry is no great disaster - what 2009 will hold for us in another matter entirely.
The data contained in the listing was obtained by our greatest effort yet to contact as many companies around the world as possible by including the data sheet with the mailed issue of the January-February issue of D&Ri. As a result, there are some new names on the list - there are 16 of these in total.
A number of these are not new to the list, however, with several familiar names reappearing - sourcing financial data is never easy, as we never use estimates of earnings but rely on the companies themselves and independent financial reporting services to obtain our data.
For the first time, we have also included a separate listing of the 50 companies who did not make it into the top 100. Despite the downturn experienced by the industry, the barrier to the D&Ri 100 has grown yet again. In last year's listing, the company at 100 in the list, Dorton Group, reported 2007 earnings of US8.6.
This year's equivalent, Caruso, reported a figure of US$11.5 million,
The list has also reverted to type, with the top four positions being held by US contractors, although the UK's Keltbray and Canada's Quantum Murray give them a run for the money. It should also be pointed out that Keltbray's overall figure is not helped by the relative weakness of the Pound Sterling to the US Dollar - perhaps fair revenge for last year when European companies figures were considerably inflated by the weakness of the US Dollar in the financial markets at the time.
The situation with CMA Corporation is also illustrative of the dangers that can be involved in compiling financial data on the industry. Last year, we used data for CMA from one of the financial reporting service, but this year the company supplied data itself.
The result is that the US$218.3 reported in 2008, which placed the company in second slot, was clearly in error, since this year's comparable figure is US$22 million, placing the company at 63 n the list. While there has unquestionably been a slowdown during 2008, a difference of that magnitude suggests to your editor that the 2008 data was substantially inflated above the correct figure,
At first glance, the star performer on the list is Czech outfit PSG-International, who has jumped straight in at 13. I do, however, hold some reservations over this data, since I suspect, but was unable to prove, that this revenue includes general construction revenue in addition to demolition related revenue. I could be wrong,of course.
Another who appears to have suffered from the curse of possibly inaccurate information would appear to be the UK's Bagnall, who has soared up the list from a lowly 102 to 16. Once again I suspect that inaccurate data sourced in 2008 was the major cause of this. If this is not the case, then that company is certainly bucking the trend.
Behind Bagnall comes Russian contractor Association of Demolition, who has seen its annual turnover grow by more than 30%, pushing it up the list by 11 places to 12. This reflects the massive amount of regeneration and redevelopment currently ongoing in its home city of St Petersburg and the surrounding areas.
Overall, the top ten have held their own (with the exception of CMA, as already mentioned), with only a degree of shuffling around amongst them. Overall, they generated a combined revenue of US$1,615.1 million.
This is down from the equivalent figure of US$1,650.6 million. This represents 34.9% of the overall total - a percentage that, however, is up on last year, when the top 10 contributed 32% to the overall total.
The effects of the current market conditions can be seen by the fact that the number reporting revenues in excess of US$100 million has fallen from 11 to 9, whereas last year the number grew from five in 2007 to 11 (including CMA).
Almost without exception, middle order contractors on the least have seen their revenues fall during 2007, but again the percentage reductions appear to be generally reasonable small. However, German contractors appear to have been fairly hard hit, with a number reporting reductions in the order of 50%. Spain and Italy too appear to be tough markets currently.
At this point I should point out that the 'fall' reported by Demosten that has seen it drop to 20 from 6 is not attributable to economic factors - the company when listed in 2008 was made up of a partnership with Demokrite, which has subsequently been dissolved.
The 50 companies at the top of the list contributed US$3,688 or 79.7% to the overall total figure. This percentage is down on the equivalent last year, when the top 50 contributed 83%. This of course means that the bottom 50 contributed US$937.4 or 20.3%.
The 50 companies listed as being outside the D&Ri100 contribute an additional US$308.1 million.
As with many things in the construction sector no-body really knows exactly how many demolition contractors, large and small, are currently active around the world. In addition, many are privately owned and keep the data on their financial performance close to their chests.
I like to believe that the D&Ri listing contains most of the leading large and medium sized contractor but acknowledge that while we make every effort to contact sizeable contractors around the world, there will nevertheless be omissions.
If readers feel their company deserves to be included in the D&Ri100 and they are able to share the necessary data, they should make contact with us. We endeavor to produce as comprehensive a listing as possible, but we can only achieve this with the assistance of the industry itself.