BAM results show children’s hospital developer had profitable 2022

BAM Contractors Ltd, the Dutch-owned Irish company that is the lead contractor for the new National Children’s Hospital in Dublin, made a pretax profit of €11.9 million last year, according to accounts just filed.

The hospital building project has been beset with delays, cost overruns, and disputes with the National Paediatric Hospital Development Board (NPHDB), which is overseeing the now more than €2 billion project.

In June the Commercial Court was told by BAM that it would not be possible to calculate the likely total cost of the project until a legal dispute between it and the NPHDB was resolved.

“The construction of the new children’s hospital has advanced well during the year and is now near 80 per cent complete,” the directors of Bam Contractors Ltd say in a report accompanying the group’s latest financial accounts.

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“Due to its complexity and scale, it remains a significant project in our current portfolio. The project continues to present challenges to the group from an operational and financial perspective, including those arising from the historical impact of the Covid-19 pandemic.

“Maintaining the project’s strong safety record and completing the works remain key objectives of the group, along with resolution of the outstanding variations and claims.”

The consolidated results for the company and its subsidiaries shows a turnover of €705 million in 2022, up from €626 million the previous year. Profit before tax was up by €1.2 million and accumulated profits at year’s end were €100 million.

No details are given in the accounts as to the contribution of the hospital project to the year’s results.

The group is in a number of joint ventures in the Republic and abroad. In Ireland “the industry remains in delicate circumstances with procurement reform and rebalancing of risk allocation long overdue”.

Significant challenges existed due to the rise in construction costs caused by the outbreak of war in Ukraine, as well as due to the disruption and supply chain shortages caused by Covid-19. Likewise, the return of higher interest rates had stifled investment in public and private projects, the directors said.

During 2022 the group employed an average of 825 staff, up 72 on the previous year, at a cost of €66 million.

The subsidiary, BAM Property Ltd, has a property portfolio consisting of land banks, residential units and commercial properties, according to the accounts. A value of €65.7 million is given in the accounts for land held for property development.

The group owns a development site at Castlelake, Carrigtwohill, Co Cork, where it plans to build a big residential development.

In the Commercial Court in July a case taken in 2020 by the National Paediatric Hospital Development Board was re-entered by Bam into the fast-track court after a failed attempt at a negotiated settlement.

BAM’s commercial director, Seamus Kealy, said “thousands of hours” had been devoted to settlement discussions between October 2021 and May 2023.

A resolution would require various commitments from both sides regarding the overall completion date and final price for the hospital, he said. The settlement discussions were aimed at resolving thousands of claims involving hundreds of millions of euros, the court was told.

Bam Contractors is owned by Royal Bam Group of the Netherlands, shares in which are quoted on the Euronext stock exchange in Amsterdam.