ATHEX: PLAT
Reuters: THRr.AT
Bloomberg: PLAT GA
The purpose of the current release is to present the Group’s financial results for the first half of 2018 and to highlight the basic factors that contributed to such.
The basic characteristics of the period are summarized as follows:
· Increase in the consolidated sales volume by 2.3% and increase in the consolidated turnover by 2.6%. The higher turnover level was mainly due to the Packaging Unit as the Technical Fabrics Unit posted only a marginal increase compared to the year 2017. The additional volumes generated from the investments implemented in the Technical Fabrics sector during the period 2015-2016 (concerning mainly the Greek subsidiaries of the Group) have been allocated almost to their entirety, whereas the investments which are being implemented during the period 2017-2018 will be completed within the first quarter of 2019 and the higher utilization of these investments will occur within the year 2019.
· Sustaining the Gross Profits at the levels of year 2017 (however with a contraction of the Gross Profit margin) due to the following reasons:
o The raw material prices during the first half of the year continued their upward trend. Despite the fact that the Group’s subsidiaries proceeded with respective increases in the sale prices, the time delay and the inability to transfer the entire cost increase into the final prices in certain cases, affected negatively the Gross Profit margin.
o The Greek subsidiaries of the Technical Fabrics Unit which invested in higher production levels and new product offering during the period 2015-2016 set the target of higher production capacity during 2017 following the new investments, whereas during 2018 they set the target of improved Gross Profit margin. That objective had been already fulfilled during the first half of year 2018 when a significant improvement was realized compared to 2017. In contrast, the subsidiaries of the Group in Scotland and America experienced pressures on their Gross Profit margin and as result no improvement took place in the above cases. More specifically:
§ The Group’s subsidiary in Scotland has been affected by BREXIT since the EUR/GBP exchange rate has led to a significant incremental increase of the raw material prices, which was not feasible to be transferred in the final sale price. Also, the uncertainty prevailing in the market due to the BREXIT has resulted into the lower demand for certain products. The Management of the Company has directed its efforts in markets outside Great Britain in order to take advantage of the improved competitive position given the trend in the exchange rate.
§ The market of the geosynthetics in US in the first half of the year was characterized by a significant reduction in demand and also by a pressure on the sale prices due to lower demand. However, this trend appears to be reversed in the third quarter of the year. Moreover, the Company has encountered a situation of increased costs as during the year a new investment is under progress which will in turn result into higher production capacity and lower production cost.
o Increase in the sales volume and Turnover along with contraction of the Gross Profit margin in the Packaging sector due to the particular conditions prevailing in the Bulgarian market, as well as due to the inability to transfer the higher raw material cost into the final sale price.
· Containment of Administrative and Distribution Expenses at the levels of year 2017, since the positive foreign exchange differences that mainly resulted from the appreciation of the dollar versus the Euro had a positive effect on the results of the Group.
Specifically, the basic financial figures of the Group during the first half of the year as compared to the same period of 2017 settled as following:
(amounts in Euro million) |
1st Half 2018 |
1st Half 2017 |
Change % |
Consolidated Turnover |
165.2 |
161.1 |
+2.6% |
Consolidated Gross Profit |
34.4 |
34.5 |
-0.04% |
Consolidated ΕΒΙΤ* |
9.6 |
8.7 |
+9.6% |
Consolidated EBITDA* |
16.3 |
15.4 |
+6.0% |
Consolidated EBT |
7.6 |
6.5 |
+16.2% |
Consolidated EATAM |
5.3 |
4.6 |
+16.4% |
Basic Earnings per Share (in Euro) |
0.1219 |
0.1047 |
+16.4% |
The total Equity on 30.06.2018 amounted to € 145.0 million compared to € 137.5 million on 31.12.2017 and the Net Bank Debt amounted to € 72.5 million compared to € 57.8 million on 31.12.2017. The ratio Net Bank Debt / Total Equity settled at 0,50x compared to 0.42x on 31.12.2017.
Prospects about the 2nd Half of the Year 2018
The third quarter of the current fiscal year follows the same trend with the first half of the year in terms of both Turnover and Earnings and also as compared to the same period of 2017. This trend is estimated to continue during the fourth quarter of the year 2018. With regard to the entire fiscal year 2018, the Group’s Management estimates that there will be no significant changes in the conditions of the market compared to the first half of the year and therefore it anticipates the same improvement outlook compared to the year 2017. However the above estimates may be affected by a possible international event or development.
The Group, following the successful implementation of the investment plan of the 2-year period 2015-2016 that amounted to 52 million Euros, proceeds into the further utilization of these investments whereas at the same time it continues to implement the new investment plan of the period 2017-2018 which will account for 44 million Euros. The new plan aims at further increasing the production capacity as well as at the development of innovative products. The maintenance of the healthy capital structure of the Group, despite the expanded investment plan of the last 4 years, in combination with the healthy operating and organizational structures which it currently possesses provides the Group’s Management with the ability to continue achieving its strategic goals.
* Note
Alternative Performance Measures (APM):During the description of the developments and the performance of the Group, ratios such as the EBIT and the EBITDA are utilized.
EBIT (The indicator of earnings before the financial and investment activities as well as the taxes): The EBIT serves the better analysis of the Group’s operating results and is calculated as follows: Turnover plus other operating income minus the total operating expenses, before the financial and investment activities. The EBIT margin (%) is calculated by dividing the EBIT by the turnover.
EBITDA (The indicator of operating earnings before the financial and investment activities as well as the depreciation, amortization, impairment and taxes): The EBITDA serves the better analysis of the Group’s operating results and is calculated as follows: Turnover plus other operating income minus the total operating expenses before the depreciation of fixed assets, the amortization of grants and the impairments, as well as before the financial and investment activities. The EBITDA margin (%) is calculated by dividing the EBITDA by the turnover.