Construction company behind National Children's Hospital posts 78% increase in pre-tax profit
From Bam 2023 — In €705m 2022 In A Turnover Of €468m Generated Down
BAM, the construction company behind the controversial and over-budget development of the National Children’s Hospital (NCH), posted a pre-tax profit of €21.3m last year — a 78% increase compared to 2022.
In its latest financial statement, the company said it generated a turnover during 2023 of just over €468m down from €705m during 2022. The cost of sales last year stood at over €433m.
The company said that although turnover was down 34% compared to last year, the focus on “fewer but better quality projects” has started to yield “positive operating results, with the profit before tax increasing by 79% compared to the prior year".
“Overall, in 2023 we had good performance across the combined property, facilities maintenance, civil and building business units,” the company said.
BAM’s profit before tax increased from just under €12m in 2022 to €21.3m last year. The tax on profit came to €1.3m resulting in profit for the financial year of €20m.
In its statement, the company said contributions to its Irish construction turnover “were based on our continued strong presence across all market segments, particularly the private commercial and health sectors”.
“Our civil turnover was largely generated by public transport infrastructure. Northern lreland turnover was again driven by our continued presence in the health sector along with our civil projects in Scotland,” it said.
On the issue of the NCH, BAM said that construction “advanced well during the year” but due to its “complexity and scale, it remains a significant project in our current portfolio”.
The company also hit back at criticism it has received over the ballooning budget of the NCH which, it said, was due to the historical impact of the pandemic and “ongoing design changes by the client”.
“The project continues to present challenges to the group from both an operational and financial perspective,” the company said.
“Despite recent negative publicity on the cost and completion date for the NCH, a lot of which is ill-informed and fails to mention the rework necessitated by thousands of design changes by the client as the root cause of most of the delays and cost overruns, we are confident of delivering a world-class facility upon completion of the hospital.”
In its financial statement, the company said it had been successful in a conciliation process in respect of the NCH and secured an award of €107.6m which has “increased the contract value correspondingly”.
“This award also granted an extension of time on the project and provided for relief from potential penalties related to the completion date of the project,” the company said.
The initial budget for the NCH was set at €650m and was expected to be delivered in 2020. Last month, Health Minister Stephen Donnolly said BAM committed to a completion date of June next year with the full cost of the hospital expected to set the State back €2.2bn.
Any further delays could see the completion date slip into 2026.
BAM has been heavily criticised for the soaring costs and delays to the project by various politicians including Minister Donnelly. During a meeting of the Oireachtas Health Committee in October, he said BAM asked the Government to pay €25m for a job at the NCH which actually cost less than €200,000 to carry out.