PEGAS NONWOVENS confirms full year guidance for 2011
August 27, 2011 - Czech Republic
Based on unaudited results PEGAS NONWOVENS SA (hereafter "PEGAS" or "Company"), a leading European producer of nonwovens textiles, recorded EBITDA of EUR 15.3 million in the first half of 2011 and confirms its full year EBITDA guidance.
In the first half of 2011 consolidated revenues (revenues from sales of products) reached EUR 82.6 million, up by 20 % yoy. The total consolidated revenues in the second quarter of 2011 were EUR 41.6 million, a 20.8 % increase compared with the same period last year. A key role in the development of revenues was played by the continued grown of polymer price indices.
Operating profitability before depreciation and amortization, interest and taxes measured by EBITDA was EUR 15.3 million, down by 6.2 % yoy. The decline in EBITDA in the first half of this year is the result of the higher negative effect of the delay in the material price pass-through mechanism compared with the same period in 2010 and the increase in staff costs. EBITDA amounted to EUR 7.0 million in the second quarter of 2011, down by 5.7 % yoy. The main reason for the year on year EBITDA decline is the increase in staff costs expressed in EUR resulting from the appreciation of the CZK against the EUR, the hiring of new employees for the ninth production line and the revaluation of the share option plan to fair value.
In the first half of 2011 Profit from operations (EBIT) amounted to EUR 11.1 million, up by 36.8% over the same period in 2010. In the second quarter of 2011 profit from operations (EBIT) increased by 48.2 % to EUR 4.9 million. The annual increase of profit from operations was namely on the back of changes to the depreciation of production technology.
In the first half of 2011 Net profit reached EUR 10.8 million, up by 14.3% yoy. In the second quarter of 2011 the Company achieved a net profit of EUR 4.4 million, up by 147.7% over the same period in 2010 due to the effect of lower depreciation and amortization and higher FX gains.
"I am glad to be able to confirm the initial full year EBITDA guidance given in March this year, although our financial results achieved in the first half of the year were affected by significant increases in polymer prices reaching historical highs in April. For the past few weeks we have been registering a decline in the prices of our main input materials and we believe that the negative impact of the price pass-through mechanism in the first half will be significantly offset by the end of the year. Moreover, in combination with the new capacities coming on board, the planned annual financial results will be met.", said František Rezác, member of the Board of Directors of PEGAS NONWOVENS SA and CEO of PEGAS NONWOVENS s.r.o.
"At present, PEGAS is going through a very important period with many projects underway. Apart from the final stages of putting a new production line into operation we recently announced our intention to construct a production plant in Egypt. We are now working on the individual project stages and believe we will bring our shareholders positive news about its further development. Also, in connection with this project, we completed the process of refinancing our bank loan in June, which will enable us to execute the planned investment projects without having to amend our progressive dividend policy. Therefore, at the end of July we were able to announce a dividend payment of EUR 1.00 per share", concluded František Rezác.
In the first half of 2011 consolidated revenues (revenues from sales of products) reached EUR 82.6 million, up by 20 % yoy. The total consolidated revenues in the second quarter of 2011 were EUR 41.6 million, a 20.8 % increase compared with the same period last year. A key role in the development of revenues was played by the continued grown of polymer price indices.
Operating profitability before depreciation and amortization, interest and taxes measured by EBITDA was EUR 15.3 million, down by 6.2 % yoy. The decline in EBITDA in the first half of this year is the result of the higher negative effect of the delay in the material price pass-through mechanism compared with the same period in 2010 and the increase in staff costs. EBITDA amounted to EUR 7.0 million in the second quarter of 2011, down by 5.7 % yoy. The main reason for the year on year EBITDA decline is the increase in staff costs expressed in EUR resulting from the appreciation of the CZK against the EUR, the hiring of new employees for the ninth production line and the revaluation of the share option plan to fair value.
In the first half of 2011 Profit from operations (EBIT) amounted to EUR 11.1 million, up by 36.8% over the same period in 2010. In the second quarter of 2011 profit from operations (EBIT) increased by 48.2 % to EUR 4.9 million. The annual increase of profit from operations was namely on the back of changes to the depreciation of production technology.
In the first half of 2011 Net profit reached EUR 10.8 million, up by 14.3% yoy. In the second quarter of 2011 the Company achieved a net profit of EUR 4.4 million, up by 147.7% over the same period in 2010 due to the effect of lower depreciation and amortization and higher FX gains.
"I am glad to be able to confirm the initial full year EBITDA guidance given in March this year, although our financial results achieved in the first half of the year were affected by significant increases in polymer prices reaching historical highs in April. For the past few weeks we have been registering a decline in the prices of our main input materials and we believe that the negative impact of the price pass-through mechanism in the first half will be significantly offset by the end of the year. Moreover, in combination with the new capacities coming on board, the planned annual financial results will be met.", said František Rezác, member of the Board of Directors of PEGAS NONWOVENS SA and CEO of PEGAS NONWOVENS s.r.o.
"At present, PEGAS is going through a very important period with many projects underway. Apart from the final stages of putting a new production line into operation we recently announced our intention to construct a production plant in Egypt. We are now working on the individual project stages and believe we will bring our shareholders positive news about its further development. Also, in connection with this project, we completed the process of refinancing our bank loan in June, which will enable us to execute the planned investment projects without having to amend our progressive dividend policy. Therefore, at the end of July we were able to announce a dividend payment of EUR 1.00 per share", concluded František Rezác.