Ergis

Press Release

10 February 2015, 14:40

The Ergis group after 2014: very good results after four quarters

After four quarters of 2014, the Ergis Group, a leader of plastics processing in Central and Eastern Europe, generated revenue in the amount of PLN 667.4 million (a decrease of 0.9% over the previous year), operating profit of PLN 31 million (25.2% more than achieved in 2013) and net profit – record-breaking in the Group's history – amounting to PLN 18.7 million (an increase of 64.3% compared to 2013).

Very good operating results were achieved despite adverse market developments which occurred in the third quarter of the last year, in particular in the food packaging sector.

At present, the Group is implementing an investment programme with a value exceeding PLN 20 million, which consists in acquiring and launching another line for flexographic print at Flexergis in Nowy Sącz, and another line for the production of PET tapes at ERGIS S.A. Oława Plant.

The Company’s Management Board will recommend that dividend be paid out of 2014 profit, in line with a dividend policy defined last year that provides for payments of 7.5%-15% of annual EBITDA.

 

FINANCIAL PERFORMANCE - DETAILS

Financial results of the ERGIS Group after 2014 are presented in the table below:

 

PLN ‘000  

Q4 2014

Q4 2013

Change

4Qs 2014

4Qs 2013

Change

Revenue

162,078

153,205

+5.8%

667,377

673,263

-0.9%

Operating profit

4,460

1,441

+209.5%

31,027

24,790

+25.2%

Gross profit

1,893

1,409

+34.4%

23,993

14,450

+66.0%

EBITDA

9,529

6,578

+44.9%

53,117

45,966

+15.6%

Unrealised foreign exchange differences

-779

707

-

670

-1,337

-

Net profit

1,003

2,177

-53.9%

18,664

11,363

+64.3%

 

In Q4 2014 prices of all strategic raw materials (PVC, DOP, LLDPE, PET) were decreasing compared to those recorded in Q3. In 2014, annualised average prices were lower than (PET, DOP) or close to (PVC, LLDPE) those recorded in 2013. This means that the situation in Q4 was rather favourable as far as raw materials are concerned, and in the whole 2014 it did not significantly affect the level of margins achieved.

The Group’s revenue on sales in Q4 was higher by 5.8% over the same period of the last year, while the value of the same item for the whole 2014 was by 0.9% lower compared to 2013.

The Group recorded an increase in printed packaging (by 4.3%) and rigid packaging films (by 2.5%), and a decrease in the industrial packaging group (by 6.9%), which primarily concerned stretch film and was a result of a change in the sales structure, i.e. replacing the traditional stretch film with nanoErgis film. The decrease in the PVC soft film group (by 2.5%) concerned insulating films and was due to high sales volume in 2013, partly resulting from the execution of a one-off contract. The increase in the “other sales” group refers to compounds, and is due to the Company’s re-gaining sales values of this product type achieved in earlier periods.

Very good operating results were achieved despite adverse market developments which occurred in the third quarter of the last year, in particular in the food packaging sector.

 

INVESTMENT PROGRAMME

On 4 September 2014, the Company’s Supervisory Board approved an additional investment programme, the implementation of which started at the turn of the third and fourth quarter of 2014. The programme covers the following components:

  • the investment in the new line for flexographic print in Flexergis in Nowy Sącz with the value of PLN 8.5 million. The launch of the new line is scheduled for the turn of the first and second half of 2015;
  • the investment in the new line for the production of PET tapes in ERGIS S.A. Oława Plant with the value of PLN 12 million. The production on the new line is also to be launched at the turn of the first and second half of 2015.

 

Tadeusz Nowicki, President of the Management Board of ERGIS S.A.:

“We ended the last year with very good operating results, including the Group’s record-breaking net profit of PLN 18.7 million. This is, among other factors, attributable to successful investment in the second line for the production of nanoErgis film. This result is even more important to us considering that it has been generated despite unsatisfactory results of the third quarter affected by unfavourable market developments. As previously declared, the Management Board intends to recommend to the shareholders that dividend be paid in the amount corresponding to the dividend policy adopted last year.

In accordance with the strategy presented by the Company, we are finalising the investment programme announced in 2014. The programme consists in investing in a new line for flexographic print at Flexergis in Nowy Sącz and a new line for the production of PET tapes in ERGIS S.A. Oława Plant. Production on both lines is to be launched at the turn of the first and second half of the next year.”

 

ADDITIONAL INFORMATION

The ERGIS Group is the leader in plastics processing in the Central and Eastern Europe. Out of its six manufacturing plants, four are situated in Poland and two in Germany. The Group’s profile includes manufacturing of packaging for food (films and PVC and PET-based barrier laminates, printed multilayer laminates) and industrial packaging (LLDPE stretch films and PET films). Moreover, ERGIS is a manufacturer of films for packaging pharmaceuticals, hydro-insulating films and PVC compounds. In 2014, the Group’s revenue exceeded PLN 667 million.

Additional information is also available at www.ergis.eu

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