Pegas Nonwovens expects marginal EBITDA rise in 2013
March 21, 2014 - Czech Republic
Based on preliminary unaudited results, PEGAS NONWOVENS SA, a leading European producer of nonwovens textiles, recorded consolidated revenues of EUR 199.2 million in 2013, up by 6.1% yoy.
In the fourth quarter of 2013, consolidated revenues reached EUR 53.2 million, up by 11.8% yoy. The year-on-year growth in revenues was the result increased sales levels related to the start of production on the new Egyptian production line.
Operating profitability before depreciation and amortization, interest and taxes measured by EBITDA was EUR 38.6 million, up by 1.1% yoy. The year-on-year comparison was positively affected by the raw material price pass-through mechanism and a weaker CZK/EUR exchange rate. On the other hand, the comparison was negatively impacted by lower than planned production results and the revaluation of the share option plan to fair value.
After excluding costs related to the revaluation of the share option plan to fair value in the amount of EUR 0.8 million, the 2013 result is slightly higher than the updated guidance announced in November last year, where the Company indicated an EBITDA level between EUR 37 and 39 million. In the fourth quarter of 2013, EBITDA reached EUR 10.6 million, up by 14.3% yoy.
The increase in the indicator resulted from the positive effect of the raw material price pass-through mechanism, the weaker CZK/EUR exchange rate and the gradual ramp-up of production in Egypt. However, lower than planned production results and the effect of the revaluation of the share option plan to fair value weighed down the growth of this indicator.
In 2013, profit from operations (EBIT) amounted to EUR 25.5 million, down by 4.0% compared with 2012, influenced by an increase in depreciation. In the fourth quarter of 2013, profit from operations (EBIT) increased by 1.3% to EUR 6.8 million.
Net profit reached EUR 1.4 million in 2013, down by 93.3% yoy, primarily due to the negative effect of FX changes in the compared periods. In the fourth quarter of 2013, the Company recorded a net loss in the amount of EUR 7.6 million compared with a profit of EUR 3.2 million achieved in the same period in 2012. This was primarily the result of the weakened CZK/EUR foreign exchange rate and the subsequent revaluation of Euro denominated balance sheet items.
"In 2013, we achieved an EBITDA of EUR 38.6 million. After excluding the revaluation of the share option plan to fair value we have slightly exceeded the updated guidance that we announced in November last year. From a purely financial point of view, the year 2013 lagged slightly behind our original expectations, nevertheless, we are convinced that, to a significant degree, last year's results were impacted by an array of one-off factors, which should notreoccur.
Notwithstanding, from a strategic perspective it was, in my opinion, one of the most successful year's in the company's history, where PEGAS made a truly momentous step forward.
Over the past several years and particularly in 2013, we expended tremendous effort and invested substantial resources into the company's development. We look toward the upcoming years with optimism and we believe that this effort will also manifest itself in our financial results.
The primary prerequisite for achieving our goals is and always will be a satisfied customer and secured sales volumes. Therefore, we are pleased that the contracts negotiated with our customers again indicate the full utilisation of our production capacities. This is all the more important considering that, compared to 2013, we have substantially expanded our production capacity thanks to the new Egyptian production line.
This facility was put into operation within the context of a challenging political and security environment in Egypt in line with the initially planned schedule and it is now delivering very encouraging operating results. Last year, we dedicated a great deal of attention and resources to the development of new materials, the successful commercialisation of which, will bring a change in our product portfolio mix.
Taking into account also the contribution of these factors, we expect an improvement in the financial results in 2014 and a year-on-year EBITDA growth in the range between 12% and 22%. In terms of both operating and financial results, 2014 should be a year of consolidation for PEGAS. We intend to focus particularly on eliminating the operating issues that we had to deal with last year.
In Egypt, our objective is to achieve similar operating results as in the Czech Republic. Considering that we are not planning any demanding investment projects this year, we foresee a reduction of the Company's debt level and an improvement of its financial profile", said František Rezác, CEO and Member of the Board of PEGAS NONWOVENS SA.