Granite Reports Significant Profit Driven by Dividends
The largest construction company in North Macedonia, Granite, has achieved a profit where 75% comes from dividends on its shares in the Commercial Bank. The company has received €1.7 million in dividends, and its shares in the bank are now valued at €40 million. This strategic move to acquire the shares has proven to be visionary, providing Granite with a solid foundation during uncertain times, especially as business activities appear to be slowing down.
Financial Performance Overview
In the first half of the year, Granite reported a profit of €2.22 million, which is encouraging news for its thousands of shareholders. Furthermore, this year’s profits have increased by 70% compared to the same period last year. However, it is important to note that Granite has not experienced significant growth in its operational activities. In fact, its business is down by 11% compared to the previous year. For the first six months, Granite generated total sales of €30.8 million, all of which were collected from activities exclusively within the domestic market.
Market Competitiveness and Revenue Decline
This raises questions about whether Granite is uncompetitive in foreign markets or if it simply does not need to expand abroad because it is performing well in Macedonia. Given the current results, shareholder satisfaction may be lower than last year, as the company’s revenues have decreased. Last year, with a similar potential, the company reported revenues of €35.4 million.
Operating Expenses and Employee Costs
The largest expense category for Granite consists of services considered material costs, amounting to €12.9 million. This figure has decreased by 28% compared to the same period last year, indicating that Granite has significantly reduced its reliance on third-party services in its operations, which has also contributed to lower revenues. These two factors suggest a reduction in the overall scale of Granite’s operations. For its employees, Granite has paid nearly €7 million in the first half of the year, with no increase in employee costs compared to last year. Their salaries have been affected by inflation, which has decreased this year but has not stopped entirely. The impact of this on employee motivation within Granite is uncertain, yet it is evident that the construction sector has not been the most attractive field for job seekers.
Operational Profitability and Future Prospects
Granite’s operational profit for the first half of the year stands at €561,000, representing a 25% improvement compared to the previous year. The key to Granite’s success this year lies in its shares in the Commercial Bank. The cash flow report indicates that Granite has received €1.7 million in dividends. The decision to purchase shares in Commercial Bank six years ago has proven to be an excellent deal from today’s perspective, especially since over 75% of Granite’s total profit is solely attributed to its shares in the largest business bank in Macedonia.
Visionary Leadership and Shareholder Value
The best news for Granite’s shareholders is the visionary move made by management when they acquired shares in Commercial Bank in 2018. According to the official profit and loss statement, the value of these shares at the end of June was €13.86 million higher than their purchase price. By the end of June, Granite’s shares in Commercial Bank were valued at €40 million—an increase of 52% from their initial investment.
Financial Highlights of Granit
In the recent financial report, one noteworthy observation is that Granit has managed to maintain a remarkably low amount of interest payments on loans, currency fluctuations, and other financial expenses. Over a six-month period, the total financial costs amounted to only 100,000 euros.
When compared to the same period last year, this represents a 24 percent reduction in expenses, highlighting the company’s improved financial management and cost efficiency.
