Frigoglass announced a 24.6% increase in sales to € 119.4 million for the first quarter of the year, while Earnings before Taxes, Interest and Depreciation (EBITDA) decreased by 29.4% compared to last year, in € 10.2 million At the same time, the company announced that net losses amounted to € 2.1 million, compared to net profits of € 1.2 million in the first quarter of 2021.
In detail, Frigoglass SA announces unaudited financial results for the quarter ended March 31, 2022
Highlights of the first quarter 2022
Ση Sales increase by 25% compared to last year as a result of the continuous recovery of demand in both sectors as well as the low comparative base
Τικής Sales of the Commercial Refrigeration sector in March were significantly affected by order cancellations in Russia and delays in the delivery of commercial refrigerators across Europe due to transport malfunctions
▪ Strong increase in sales in the Glass sector on a neutral exchange rate by 51% (Published + 56%) as a result of dynamic demand and price adjustments
E The EBITDA margin was negatively affected mainly by the increased cost of raw materials and transportation, the forecasts for doubtful receivables from customers in Ukraine, as well as the less favorable energy mix in Nigeria.
Ωση Reduction of Adjusted Free Cash Flows at the end of March as a result of declining operating profitability, high inventories due to delays in commercial refrigeration deliveries to Europe, and accumulation of raw materials to support production in both sectors
. Strengthening of cash and cash equivalents after the payment of insurance compensation of € 10 million in February for material losses. Collection of € 8 million in April and May, including an advance related to business interruption compensation due to a fire at our factory in Romania in 2021
Ανακα The reconstruction of the factory in Romania is proceeding according to schedule. The plant is expected to reopen in the first quarter of 2023
Και Supply chain and production constraints in Russia and Romania are expected to affect results for 2022
▪ Plan to strengthen the assembly line in Romania by July 2022, and until the new plant is put into operation
▪ Launching the process of examining the strategic choices of the company with the cooperation of consultants aiming at safeguarding the interests of all stakeholders and improving its capital structure
Mr Nikos Mamoulis, CEO of Frigoglasscommented:
“Despite the continuing recovery in sales in the first two months of the year, the challenges posed by the Russia-Ukraine conflict significantly affected our results in March. We are taking significant steps to reduce the impact of the Russia-Ukraine conflict and increase it. costs, as the current geopolitical environment has caused considerable uncertainty regarding the operational and financial performance of the year. ”
Overview of Results
In the first quarter, strong demand remained in both sectors. The lifting of the restrictive measures in the canals of direct consumption worked positively for the consumption of soft drinks and, consequently, for the investments in equipment of professional refrigerators by our strategic partners in the soft drinks and beverages sector. Sales growth in the Commercial Refrigeration sector was boosted by rising orders in Western Europe, Asia and Africa, while Eastern European markets were hit hard by order cancellations and product shipping restrictions in March. In Russia, our largest market in Eastern Europe, some of our customers canceled or postponed their orders after escalating tensions between Russia and Ukraine. In the midst of this environment, sales in the Commercial Refrigeration sector increased by approximately 15%. Sales in the Glass sector maintained their upward trend, as a result of increased demand and price adjustments. In total, the sales of the Group increased by 24.6% to € 119.4 million
The gross profit (excluding depreciation) amounted to € 19.8 million, down 13.3% compared to last year, with the corresponding margin decreasing by 730 basis points to 16.6%. The shrinking margin reflects rising raw material costs, particularly high transport costs due to supply chain constraints exacerbated by the situation in Russia and Ukraine, and the less favorable energy mix in Nigeria. The above factors overshadowed the benefits of increased sales, price adjustments and lower discounts.
The operating expenses (excluding depreciation) increased by 7.7% compared to last year, to € 9.5 million, due to provisions for doubtful receivables from customers in Ukraine, thus offsetting the lower wage costs. Operating expenses as a percentage of sales improved by about 120 basis points to 8.0%, as a result of the increase in sales compared to last year.
Earnings before Taxes, Interest and Depreciation (EBITDA) decreased by 29.4% compared to last year, to € 10.2 million, with the corresponding margin falling to 8.5% compared to 15.1% in the first quarter of 2021. operating profit (EBIT) amounted to € 5.7 million, a decrease of 42.8% compared to last year, as they are directly affected by the fall in Earnings before Taxes, Interest and Depreciation (EBITDA). The financial cost amounted to € 5.7 million compared to € 3.4 million in the first quarter of 2021, as a result of last year ‘s foreign exchange gains due to the significant devaluation of the Nigerian Nair. Income tax expenses amounted to € 0.9 million, compared to € 3.4 million in the first quarter of 2021, a decline that reflects pre-tax losses on profits in the first quarter of 2021 as well as the deferred tax of last year which related to unrealized foreign exchange gains. The net losses amounted to € 2.1 million, compared to net profits of € 1.2 million in the first quarter of 2021.
Adjusted free cash flow was negative € 27.2 million at the end of March 2022 compared to positive € 0.2 million at the end of March 2021. Adjusted free cash flow was mainly driven by lower operating profitability and stock accumulation. The accumulation of stocks reflects the purchases of raw materials to ensure their availability in both sectors and the increased inventory of finished products in the Commercial Refrigeration sector, following the challenges posed by transport in Europe, and in the Glass sector to meet future demand. . Adjusted net debt amounted to € 281.1 million compared to € 260.7 million in March 2021. At the end of March 2022, cash and cash equivalents amounted to € 59.0 million compared to € 62.2 million in March. 2021.
See the full announcement in the right column Related Files
Source: Capital
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