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Nonwovens producer Pegas posts 15% rise in Q1 profit

28 May '12

3 min read

Pegas Nonwovens SA, a leading European producer of nonwovens textiles, recorded consolidated revenues of EUR 44.3 million in the first quarter 2012, up by 8.0% yoy.

The year on year increase in revenues was the result of increased volumes of sold production on the back of the new production line, which was put into operation in the second half of 2011. However, polymer prices declined slightly, down by approximately 5% yoy.

Operating profitability before depreciation and amortization, interest and taxes measured by EBITDA was EUR 9.5 million, up by 15.0% yoy. The year on year EBITDA increase was achieved namely due to the contribution of the new production line. Whereas the first quarter of last year was negatively impacted by the delay in the pass-through of raw material prices into the prices of finished products, the effect of this mechanism in the first quarter of this year was slightly positive. By contrast, the year on year comparison was negatively affected by an increased number of days of regular maintenance breaks in the first three months of this year and by changes in the level of finished goods inventories.

In the first quarter of this year the Company's operating profit grew by 4.3% to EUR 6.4 million. The increased profit from operations was positively affected by the growth of EBITDA and negatively affected by a higher level of depreciation and amortization.

Net profit amounted to EUR 8.7 million representing a yoy increase of 36.4% as a result of higher EBITDA and higher unrealised FX gains.

"In the first quarter of this year the output from the new production line that was put into operation in the second half of last year was notably recorded in our results. The production from the new line contributed to the 8% year on year increase in revenues which amounted to EUR 44.3 million and to the 15% year on year increase in EBITDA which reached EUR 9.5 million. The achieved results are in line with our expectations.

In the first months of the year we again recorded a significant increase in the price of polymers, which will have a negative effect on operating profitability in the second quarter. Although it is not possible to precisely estimate the development of polymer prices, we are currently seeing signs that the market is stabilising and we strongly believe that we will be able to at least partially eliminate the negative impact of this external factor over the course of the year. Therefore, we have not changed our financial outlook for this year

In the coming months we want to concentrate our efforts and resources on ensuring successful construction of our production plant in Egypt. On the operating level in the Czech Republic, we will continue to optimise the operation of the newest production line and work on selling this year's remaining production capacity,” said František Rezác, member of the Board of Directors of Pegas Nonwovens SA and CEO of Pegas Nonwovens s.r.o.

Pegas Nonwovens SA