Ergis

Press Release

15 November 2011, 13:39

The Ergis GROUP after three quarters of 2011: further increase in sales

 THE ERGIS GROUP AFTER THREE QUARTERS OF 2011: FURTHER INCREASE IN SALES, INCREASE IN OPERATING PROFIT BY 27% AND IN EBITDA BY 26% IN THE THIRD QUARTER

 

The ERGIS Group, a leader in plastics processing in the Central and Eastern Europe, after three quarters of 2011 recorded a visible, marked increase in sales by approximately 6% to over PLN 474 million. This was yet another quarter during which the Group maintained, cumulatively, an increase in revenue on sales as compared to the previous period. Only in the third quarter, the operating profit reached PLN 5.7 million and was higher by 26.8% in comparison with the previous year, while after nine months it amounted to PLN 13.6 million.

 

Key events:

 

­   Revenue of the ERGIS Group after three quarters of 2011 increased by approximately 6%, and amounted to PLN 474 million. In the third quarter of 2011 the situation on the raw materials market became stable and an increase in prices was suppressed.

­   The stabilisation on the raw materials market and an increase in the EUR exchange rate had a positive impact on the level of the margins generated in the third quarter. In the third quarter of 2011, operating profit margin of the Group increased to the level of 3.5% as compared to 2.7% in the previous year.

­   The Group’s financial result for the third quarter 2011, primarily at the net and gross level, was determined mainly[u1]  by the increase in the EUR exchange rate.

­   In August 2011, in MKF-Ergis the rigid film production was launched on the process line moved from Berlin to Wąbrzeźno. The production meets the adopted assumptions with respect to both quality and efficiency. In the third quarter of 2011 the transfer of accompanying devices (rewinders, silos) was completed. Thus the process of consolidation of the PVC rigid film production in MKF-Ergis Sp. z o.o. was successfully completed.

 

 

 

FINANCIAL RESULTS – DETAILS

 

Financial results of the ERGIS Group after three quarters of 2011 are presented in the table below:

 

PLN '000

3Q2010

3Q2011

Change

1-3Q 2010

1-3Q 2011

Change

Revenue

161,847

161,306

-0.3%

448,430

474,379

+5.8%

Operating profit

4,468

5,667

26.8%

15,820

13,643

-13.8%

EBITDA

8,849

11,114

+25.8%

31,096

28,511

-8.3%

Unrealised exchange rate differences

2,604

-4,953

-290.2%

2,715

-4,386

-261.5%

Net profit

5,141

-2,759

-153.7%

11,273

1,799

-84.0%

 

An increase in the revenue on sales for three quarters of 2011 results from an increase in the prices of products sold, which in turn is a consequence of a considerable growth in the prices of basic raw materials. Particular attention should be paid to high dynamics of laminates sales (an increase by 20.7%). An increase in sales volume was recorded in the group of soft film products (5.0%) and PET tapes (by 6.2%).

In the third quarter of 2011 the situation on the raw materials market became stable and an increase in prices was suppressed, which stabilised the prices of products and the sales value. In the third quarter of 2011, the value of sales did not increase significantly in comparison with the value generated in the analogous period of 2010, with the average EUR exchange rate by approximately 3.5%. In cumulative terms, the sales dynamics accounted for 5.8%, with the average EUR exchange rate higher by approximately 1%.

 

The stabilisation on the raw materials market and the increase in the EUR exchange rate had a positive impact on the level of the generated margins. In the third quarter 2011, the gross profit on sales ratio increased to 13.5% as compared to 13.2% in the analogous period of the previous year. Further, the profit on sales ratio increased to 3.8% as compared to 2.4% in the third quarter of 2010. This was a result of a decrease in general expenses and sales costs, which jointly decreased by 10% in the third quarter, as compared to the analogous period of 2010 (cumulatively: 8%).

 

Also, in the third quarter of 2011, the value of EBITDA for the Group increased to PLN 11.1 million as compared to PLN 8.8 million achieved in the third quarter of 2010 (cumulatively: PLN 28.5 million as compared to PLN 31.1 million)

 

ERGIS GROUP INVESTMENTS

 

Currently, the Group is implementing the investment in the fourth process line for multi-layer PE stretch film production. The process line will be installed in Oława and the start-up thereof is planned for the first quarter of 2012. The expected outlays for that investment will amount to PLN 24 million, of which PLN 12 million is planned for 2011. The investment will be co-financed from the European funds under the Innovative Economy Operational Programme (40% of the expected outlays, i.e. about PLN 9.6 million), the remaining part will be financed from the bank loan. The process line will increase its production capacity with respect to stretch film by 25% in comparison with the capacity in 2011.)

“In the third quarter we completed an important investment in the PVC rigid films manufacturing plant in Wąbrzeźno. Although in the short period of time it was connected with involvement of capital, I am certain that the relocation of production means will contribute to the improvement of the Group’s financial results in the following periods. We are also eagerly expecting the results of the investment in the new process line for multi-layer PE stretch film processing in Oława, which shall become noticeable starting from the second quarter of 2012,” said Tadeusz Nowicki, President of the Management Board of ERGIS-EUROFILMS.

 

 


For more information, contact:

 

Małgorzata Kot, ERGIS - EUROFILMS S.A.

tel. 0604 159 103, 0604 159 159

e-mail: kot@ergis.eu

 

Magda Kołodziejczyk, M+G

tel. (22) 625 71 40, 0501 16 88 07

e-mail: magda.kolodziejczyk@mplusg.com.pl

 

 

 

ADDITIONAL INFORMATION

 

ERGIS Group is Poland’s largest as well as Central and Eastern Europe's leading manufacturer of PVC products: films, compounds, wallpapers, wall panelling, and windowsills. The Company's offer includes films laminated with a layer of another film, paper, woven and non-woven fabric, etc. printed films, insulation films, packaging films (including films for packaging pharmaceuticals), bus floor covering, compounds for cable manufacturing, interior and exterior wall panels, expansion joint tapes, artificial leather, coated fabrics, tablecloths, and vinyl and paper wallpapers. Additionally, the Group is Poland's largest manufacturer of stretch films (tensile films, used e.g. for wrapping loads on pallets, PVC thermoshrink films (used, e.g. for food packaging) and PET and PP tapes (used for fastening medium heavy and heavy products and loads), as well as a distributor of polypropylene BOPP film (used mainly for packaging manufacturing). The Group manufactures also packaging film for food industry (laminates, single layer films, rigid films, flexible films, ‘skin’ films), as well as flexible packaging films and multi-layer laminates.

 

Additional information is also available at www.ergis-eurofilms.eu