Finance - January 2021: Solid start to the year

By Mike Hayes22 February 2021

January figures indicate that normal service could soon resume in construction

This article will assess the period for listed contractors, equipment manufacturers and material producers from week 52 of 2020 to week 4 of 2021 (24 December, 2020 to 22 January, 2021).

Given the concerns over new Covid-19 variants, the share prices of construction businesses on the CE indexes have performed very well over the review period. The total market captilisation for companies on our Equipment Index, for example, is up over 10.5%, while the Materials index is also well in the black, seeing overall growth in excess of 6%.

Only the Contractors Index has fallen, with a drop of 0.7% over the review period. This was perhaps to be expected, with measures to prevent the spread of the virus still having a measurable impact on the levels of work contractors are able to undertake.


The latest CE index for equipment manufacturers shows growth across the majority of the companies we track. Given the current circumstances, this is significant.

One of the companies currently riding this wave of positivity is Volvo, with its share price rising by over 10.5%, during the review period.

Like many of the large OEMs on the index, Volvo’s share price has in fact been surprisingly resilient to the strain put on the global economy by the pandemic.

Another Swedish company, the mining and infrastructure specialist Epiroc, has seen solid gains at the start of 2021, with a 6.3% rise in its share price since the end of last year.

At the end of 2020, the company acquired the mining software specialist MineRP, which specialises in increasing productivity in the mining sector through the use of integrated planning and analytics.

Two Chinese manufacturers on the CE Index, Sany and Zoomlion, saw even more impressive gains, with Sany up 21.5% and Zoomlion up 26.1%.

An infrastructure boom in China, which grew from the government’s coronavirus relief stimulus package, helped Sany realise a 57% hike in profits in the third quarter of 2020 alone.

According to a recent report in The Wall Street Journal, Zoomlion is anticipating its net profit for 2020 to increase by between 60% and 72%.

The report says that with growing domestic sales, Sany and Zoomlion have managed to make market share gains on both Caterpillar and Komatsu.


EDF Energy workers undertake a major concrete pour at the UK's Hinkley Point C

Acciona saw an 11.3% increase in its share price in the review period. The Spanish multinational is reaping the rewards of a strategy of diversification that incorporates smart infrastructure projects and a strong renewable energy portfolio.

That said, Acciona is another company that was hard hit by the pandemic, with a decline of almost 14% in revenues through the first three quarters of 2020, largely from its infrastructure and energy divisions.

In Portugal, the construction and concessions firm Mota-Engil has seen some volatile share price movement recently, so its recent 16.6% slump may not surprise interested parties.

The fact that Chinese construction giant CCCC acquired a 30% stake in the company last year (doubling the company’s market valuation) has not so far had the hoped-for boost to Mota-Engil’s fortunes.

Portugal’s leading construction company will hope for a boost from CCCC, which itself is looking to Mota-Engil to help it expand its business in Latin America.

Keeping its sites open during the crisis hugely helped UK-based building company Balfour Beatty reach the start of 2021 in very good shape.

While the increase over the review period is modest (c1.8%), it is merely the continuation of an upward trajectory that began in October last year.

The group – which has an order book of approximately

€19 billion and is one of the main contractors on the UK’s €100 billion-plus HS2 rail project – recently stated that it expects to see revenue this year equivalent to that of 2019.


planta Cemex

Mexican building materials giant Cemex has performed extremely well in January, with share price growth of 20.4%.

Towards the end of 2020, the company said operational improvements had led to an EBITDA margin and cash flow levels it had not seen since 2016.

The efficient safety protocols it utilised throughout the pandemic, it said, had paid off, as well as “constructive pricing dynamics” and digital platforms.

Another producer reporting strong performance at the end of 2020, was Austrian brick manufacturer Wienerberger.

Countering some of the slowdown that was anticipated, due to the Covid-19 measures, the company cited mild winter weather conditions in Europe, which kept construction projects up and running.

The company saw its share price increase by 13.8%.

Renewables in the spotlight

The Financial Times recently released its list of the top 100 companies, based on ‘equity value added’ over the year of 2020.

In the list below, you’ll see our pick of businesses operating in the renewable energy arena. These companies were all well placed on the list, keeping company with the world’s highest-growth companies, including Tesla, Zoom Video and Shopify…

Vestas, Denmark

142% increase in market value

$48 billion market valuation (at end 2020)

Danish manufacturer Vestas, designs, builds, installs and services wind turbines and is currently responsible for some 120GW of power in 82 countries – equating to almost a fifth of the world’s installed wind capacity.

In December last year, Vestas acquired MHI Vestas Offshore Wind (MVOW), with a plan to merge the two organisations, as Vestas looks to extend its energy expertise into the offshore market.

The company has seen its revenues grow by 50% since 2018.

EDP Renewables, Spain

138% increase in market value

$24 billion market valuation (at end 2020)

EDPR is currently operating in 14 markets worldwide and is the world’s third-largest wind energy producer.

The company recently acquired an 85% in the US solar power generation company C2 Omega, which holds 89MW of operating capacity.

EDPR recently announced plans to lift its green energy generation from below 70% of its total capacity to 90% by 2030.

Siemens Gamesa, Spain

132% increase in market value

$48 billion market valuation (at end 2020)

Strong offshore growth has seen the leading wind turbine manufacturer’s revenues grow by 15% in 2020, to €2.3 billion.

This month, the company announced that, following the signing of a significant deal in Brazil, it had globally sold more than 2GW of capacity from its industry-leading 5.X turbine platform.

Orsted, Denmark

99% increase in market value

US$86 billion market valuation (at end 2020)

Orsted is the world’s largest offshore wind farms developer, with plans to expand its capacity to almost 10GW by 2022.

Looking further ahead, the company predicts it could achieve total offshore wind awards to the tune of 25-30GW over the next 12 months.

In the UK, where it is developing the Hornsea wind projects (the world’s largest offshore wind farms), Orsted’s target is to reach 40GW capacity by 2030.

This article first appeared in the January-February 2021 issue of Construction Europe magazine. To receive a regular free copy of the digital magazine, click here.

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