Cenergy announced a dynamic start to the year with improved profitability and revenue for the first quarter of 2022.
In particular, according to the results of the first quarter, sales amounted to 300 million euros, 31% higher than the corresponding quarter of the previous year (first quarter 2021: 228 million euros). The unfulfilled balance of orders remains stable at 1 billion euros on March 31, 2022 with significant project assignments in steel pipes around the world.
Operating profitability and stable profit margins have improved: The revised EBITDA amounted to 22.6 million euros, up 25% compared to the first quarter of 2021, due to strong growth in the cable sector. EBITDA reached 25.8 million euros, 39% over the corresponding period last year (first quarter 2021: 18.6 million euros) confirming the resilience of Cenergy Holdings in a highly volatile and difficult environment.
Consolidated earnings before taxes at 12.3 million euros are strong compared to 4.9 million euros for the first quarter of 2021.
Commenting on the performance of the Group, Mr. Alexis AlexiouCEO of Cenergy Holdings said: “The figures for the first months of 2022 were particularly encouraging, as we saw increased activity in the cable industry across all production lines, while recent steel pipeline assignments foreshadow a positive year. Cenergy “Holdings are taking advantage of megatrends for sustainable growth and, in particular, the global ‘green transition.’
Increased productive activity with strong operating profitability
Strong demand for cable products combined with favorable metal prices and the timely and diligent execution of cable projects from unfulfilled orders led to sales of 300 million euros, 31% higher on an annual basis. In the steel pipe sector, demand recovered, laying the groundwork for a consistently high unfulfilled order balance which, in turn, is expected to lead to high capacity utilization for the rest of the year.
The adjusted EBITDA (α-EBITDA) amounted to 22.6 million euros (+ 25% compared to the first quarter of 2021), as both sectors protected their profit margins throughout the quarter, focusing on high value-added products and passing on increased costs where possible.
At the same time, strong metal prices pushed EBITDA further, resulting in an increase of 7.3 million euros in the first quarter of 2021 compared to the corresponding quarter last year. Successful execution of major energy projects continues to be the key to the success of this profitability, as it provides a solid foundation in a difficult global macroeconomic environment.
Inflation in all basic raw materials and increased productive activity have driven higher working capital and, consequently, net borrowing. On the other hand, lower interest rates pushed net financial costs to slightly lower levels compared to the first quarter of 2021 and specifically to 6.8 million euros (-0.5 million euros or -7%).
Stronger operating profitability and lower financial expenses generate pre-tax profit of € 12.3 million, significantly higher than the € 4.9 million in the first quarter of 2021. Finally, net profit after tax stood at 9, 6 million euros, from 4.6 million euros in the first quarter of 2021, representing 3.2% of sales (compared to 2.0% in the first quarter of 2021).
Project assignments enhance the outstanding balance of orders
Our companies continued their success in the tenders, keeping the total unfulfilled balance of orders almost unchanged from the level of December 31, 2021 (approximately at 1 billion euros). Recent assignments in the first quarter of the year include:
the supply of 201 km of steel pipes for desalinated water pipeline in
Chile,
– 360 km cable inter-array for Sofia Offshore Wind Farm in the United Kingdom,
– the supply of high-frequency welding (HFW) steel pipes for the connection of the new OKEA Hasselmus gas field with the Draugen production platform in the North Norwegian Sea, and
– new island cable connections on behalf of HEDNO.
Perspectives
The cable industry benefits from both strong demand for cable products and already secured orders for cable projects. At the same time, the proven dynamics in offshore wind energy, as well as the possibility of expanding into new markets will continue to be the main drivers of profitability for the industry. The industry is expected to maintain high levels of utilization of its production capacity throughout 2022, being the main pillar of profitability of the entire Group.
The steel pipe industry is also looking forward to a positive year, as the strong outstanding balance created in recent months guarantees high utilization of production capacity, while profit margins for the rest of the year are expected to be satisfactory. Corinth Pipeworks continues its efforts to expand into new geographic markets and new innovative products, such as pure hydrogen transport pipes, carbon capture and storage solutions (CCS), infrastructure for offshore wind farms, etc.
Overall, Cenergy Holdings can maintain and further improve its performance during 2022. We consistently and clearly follow the strategy that focuses on increasing value and not volumes, developing for our customers innovative value-added solutions to the potential evolving ecosystem of energy transition. The stable structure of our companies and our constant pursuit of excellence in the technological field provide confidence for long-term sustainable development.
Finally, following previous announcements about the possible cooperation with Ørsted for the construction of a submarine cable factory in Maryland, USA, the discussions continue. The Company will inform investors about any development in the cooperation.
Source: Capital
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