Ergis

Press Release

12 May 2016, 13:33

The Ergis Group after the first quarter of 2016: increase in revenue and slight growth of EBITDA.

The ERGIS Group, the leader of plastics processing in the Central and Eastern Europe, generated revenue of PLN 172.6 million after the first quarter of 2016 (4.6% more than a year before), operating profit at a level of PLN 10.3 million (a decrease of 4.0% compared to the same period of 2015), and net profit at a level of PLN 8.8 million (less by 11.7% compared to 2015). EBITDA reached PLN 16.6 million, more by 0.2% than for the same period of the previous year.

The increase in revenue was primarily a result of a significant growth in the value of sales of industrial packaging, including the innovative nanoErgis film, very well accepted by the market. The value of soft PVC film also increased.

These results have been generated despite a not very favourable situation with regard to raw materials, i.e. an increase in LLDPE and PVC prices of almost twenty percent compared to the analogous period of the previous year.

At an Extraordinary General Shareholders Meeting of Ergis S.A. held on 22 February 2016, the shareholders approved of the acquisition of up to 5% of treasury shares.

In accordance with the accepted Dividend Policy, the Management Board intends to recommend to the General Shareholders Meeting a dividend payment for 2015 of PLN 0.16 per share, which is the top value in the Group’s history.

FINANCIAL PERFORMANCE – DETAILS

Financial results of the ERGIS Group after the first quarter of 2016 are presented in the following table:

 

PLN ‘000   

Q1 2016

Q1 2015

Change

Revenue

172,579

164,994

+4.6%

Operating profit

10,315

10,746

- 4.0%

Gross profit

8,812

10,092

-12.7%

EBITDA

16,569

16,538

+0.2%

Net profit

6,902

7,816

-11.7%

In the Group’s assessment, in Q1 2016 the situation with respect to raw materials was worse than in Q1 2015, due to significantly higher prices of LLDPE and PVC, i.e. the materials which are important from the perspective of the Company’s manufacturing profile.

The Group recorded a notable increase in the sales of industrial packaging (by 15.7% compared to Q1 2015), which is a result of changing the machine park in the Oława plant in recent years, and launching the production of nanoErgis film there. The share of sales of industrial packaging in the total revenue increased in Q1 2016 to 43.0% from 38.9% a year before.

On a year-on-year basis, the value of soft PVC film also increased (up by 4.9%).

A slight decrease (by 2.7%) in the group of rigid packaging film is a result of limited sales of the products of lower profitability due to an unfavourable situation on the raw materials market.

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

“Due to the achieved EBITDA and the value of the sales, we find the Q1 results satisfactory. We are happy with the dynamic growth in sales in the industrial packaging segment. Now we build on the effort put in the R&D works and investments, which allowed us to gain a competitive edge in this segment. This success compensates a lower profitability in the sales of food packaging. Nevertheless, it should be pointed that the results of the second quarter of 2015, which significantly exceed a quarter average, create a “benchmark effect”, therefore it is little likely that they will be repeated in Q2 2016. At the same time, considering the results of Q3 2015, the above fact may not be treated as a forecast of results for 2016 to be lower than the results generated in 2015.”

ADDITIONAL INFORMATION

The ERGIS Group, listed at the Warsaw Stock Exchange, holds the leading position in the plastics processing sector in the Central and Eastern Europe. Out of its five manufacturing plants, four are situated in Poland and one in Germany. The Group’s profile includes manufacturing of packaging for food (printed multilayer laminates, and PVC and PET-based barrier films and 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 2015 the Group’s revenue exceeded PLN 675 million. As of the end of 2015, the Group employed 830 people.

Additional information is also available at www.ergis.eu