Ing-grad: Is the construction company going public?

After the Zagreb company Ing-grad was transformed from a limited liability company into a joint-stock company at the end of November, whispers began in construction circles that owner and CEO Branislav Brizar wants to go public, for which there are quite strong indications. If he decides to take this step, according to all indicators from the company analysis we conducted, as well as the responses we received by contacting its leadership and other market players, it seems that there will be interested investors.

However, the company did not wish to comment on this possibility. Should Brizar make such a decision, we can expect an initial public offering of shares (IPO) by the end of next year, perhaps even sooner. The Zagreb Stock Exchange could not answer our question about whether an IPO application has been submitted and whether the process has begun; only the director of the Business Support Sector, Sanda Kuhtić, told us that listing on the stock exchange is the final step of the entire process.

– That is, shares are listed at the request of the company only after a successfully conducted IPO. If all documentation submitted by the future issuer is in order, the listing is approved very quickly, within a few days – explains Kuhtić.

We do not have an official answer as to why Ing-grad is going for an IPO. Among competitors, there is an opinion that they want to raise additional funds from investors that should be directed towards the company’s development, and it is not excluded that even the largest players in Croatia will be interested in investing. Because, as we are told in construction circles, Ing-grad is considered a very good company. This is also the opinion of Lider’s financial analyst and owner of Konter consulting Nikola Nikšić, who says that it is a ‘sweet spot whose business he has analyzed with pleasure.’ Such a good opinion is something that Lider’s associate has been known to express, but not often, so it seems that a very interesting market player is coming to the stock exchange.

Record Year

As Brizar told us, last year Ing-grad achieved a record revenue of 98.2 million euros (an average three-year growth of 19 percent), EBITDA of 16 million euros (an average three-year growth of 28 percent), and a net profit of 12 million euros (11.5 million euros according to Poslovna Hrvatska). However, this year could be record-breaking due to the largest volume of contracted work in the company’s history.

– We expect revenue to exceed 120 million euros, which is an increase of more than 20 percent compared to the previous record year. Financial indicators such as EBITDA and net profit will also be record-breaking. Due to an excellent book of contracted projects, we expect continued strong growth in revenue and profit in the coming years – says Brizar.

Some of the important projects the company is engaged in include the Justice Square in Zagreb (119 million euros) in collaboration with Kamgrad, the renovation and reconstruction of the Croatian Parliament building (71 million euros), and the renovation of the hot water network in the city of Zagreb (37 million euros). Among larger projects completed in recent years, they highlight the construction of a wastewater treatment plant in Osijek (30 million euros), the Student Dormitory of the University of Dubrovnik (20 million euros), and the Ivanja Reka Primary School (10 million euros). Additionally, Ing-grad worked on the renovation of the Pula Arena, and the restoration of historical and cultural heritage is one of its niches, as confirmed by projects such as the Euphrasian Basilica in Poreč, the Rector’s Palace in Zadar, the Erdödy Castle in Jastrebarsko, the Eltz Castle in Vukovar, the Krapina Neanderthal Museum, and the Vučedol Archaeological Park in Vukovar…

Another niche includes energy and infrastructure projects and environmental protection, where demanding projects have been realized, such as the construction of wind farms (e.g., Wind Farm Korlat), thermal power plants, biofuel power plants, gas stations, and a number of other infrastructure facilities. There is, of course, residential construction, albeit with the smallest share in revenue structure. In almost forty years of operation, Ing-grad has participated in more than two hundred projects across Croatia.

Above Average Activity

From 2020 to 2023, revenues nearly doubled. Brizar explains that this was achieved thanks to increased construction activity in Croatia, partly due to the post-earthquake reconstruction, which Nikšić also confirms.

– Thus, during this period, Ing-grad had more contracted projects that were generally larger in scope and complexity than before. Our expertise exceeds the boundaries of standard construction projects, which is also evident in the highly specialized segment of cultural heritage restoration, for which we were the first in Croatia to receive a license in 2000, and in which, thanks to rich references and expertise, we have no significant competition in Croatia – claims Brizar.

Read more in the new issue of the digital and printed edition of Lider.