Ergis

Press Release

23 January 2018, 13:57

Preliminary results of Ergis Group in 2017: Highest sales in history, results influenced by a growth of labour costs and prices of raw materials

The ERGIS Group, the leader in plastics processing in Central and Eastern Europe, has published preliminary financial results for 2017. The Group recorded record high revenue of PLN 750.6 million (increase of 7.8%). EBITDA level amounted to PLN 56.6 million (decrease of 5.4%), operating result: PLN 32.9 million (decrease of 6.6%) and the net profit reached the level of PLN 20.5 million (decrease of 13.9%).

The EBITDA and profit values in 2017 are burdened with an increase in the Group’s remuneration costs - by PLN 7.2 million (compared to the remuneration costs in 2016). The situation on raw materials market also adversely affected the level of realized margins. The results of sales of rigid films and laminates for food packaging had a negative impact on the presented results - in Q4 the generated EBITDA was PLN 2.5 million lower than in the fourth quarter of 2016. The EBITDA generated on the sales of PVC films for special applications was also lower by PLN 1.7 million. At the same time, the company has fully reached its targets related to the EBITDA generated on the sales of stretch films.

PRELIMINARY FINANCIAL RESULTS – DETAILS

Preliminary financial results of the ERGIS Group in 2017 are presented in the table below:

 

PLN thousand 

Q4 2017

(preliminary)

Q4 2016

Dynamics

2017

(preliminary)

2016

Dynamics

Sales revenue

175,866

165,727

6.12%

750,572

696,487

7.77%

Operating profit

1,553

4,891

-68.26%

32,888

35,209

-6.59%

Gross profit

690

3,767

-81.69%

29,295

29,952

-2.19%

EBITDA

7,629

10,872

-29.83%

56,579

59,783

-5.36%

Net profit

29

2,641

-98.89%

20,452

23,767

-13.95%

Interest bearing debt

162,987

132,868

22.67%

162,987

132,868

22.67%

In 2017, we recorded the highest sales in history. Since the market introduction of nanoERGIS® film, the share of stretch films in the Group's EBITDA has been growing significantly. These positive developments, however, did not translate into an improvement of financial results due to the increase of the labour costs and inability to transfer, in the short term, increased prices of raw materials to the prices of finished products - particularly soft PVC films, rigid films and laminates for food packaging as well as flexible packaging. Currently, our priority is launching a new PET film and laminate production line planned for the first half of 2018 in our Berlin factory and investment in another production line for multi-layer stretch film in our plant in Oława,  as well as further diversification of sources of supply - said Tadeusz Nowicki, President of ERGIS S.A. Management Board.

ADDITIONAL INFORMATION

The ERGIS Group, listed at the Warsaw Stock Exchange, holds the leading position in the plastics processing sector in 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 binding tapes). Moreover, ERGIS is a manufacturer of films for packaging pharmaceuticals, hydro – insulating films and PVC compounds. In 2017 the Group`s revenue exceeded PLN 750 million.

Additional information is also available at www.ergis.eu

.