Ergis

Press Release

03 March 2008, 09:55

ERGIS-EUROFILMS S.A. has published its Q4 2007 results

ERGIS-EUROFILMS, a leader in the plastics manufacturing industry of Central and Eastern Europe after four quarters of 2007 recorded revenue on sales of PLN 425.9 million, which is almost 40% more than in the parallel period of 2006. Its operating profit in this period was PLN 16.1 million, while its net profit amounted to PLN 11.3 million.   

Key events of the fourth quarter:            

ERGIS-EUROFILMS reported sales revenues at the level of PLN 142 million, which is 79% more than in the parallel period of the previous year.  In the fourth quarter, works began in order to incorporate MKF-Folien GmbH Minderjahn+Kiefer and Schimanski GmbH into the ERGIS Group, the transaction of acquiring of which was completed at the end of the third quarter of 2007. Through this acquisition, ERGIS-EUROFILMS strengthened its leading position in the plastics manufacturing market of Central and Eastern Europe, becoming an unquestionable leader of this market.  

FINANCIAL RESULTS – DETAILS 

Detailed financial results of the ERGIS Group are presented in the following table 

PLN '000Q1-Q4 2006Q1-Q4 2007Change
Revenue on sales304,742425,951+39.8%
Gross profit on sales53,27365,109+22.2%
Operating profit11,33216,086+41.9%
Net profit14,1488,405-40,6%
Net profit excluding extraordinary events7,2017,486+3.85%

   

Key factors that resulted in a lower profit level than in the previous year included:- EUR exchange rate, which was unfavourable for exporters, and the negative effect of which the Company estimated at the level of about PLN 2 million in terms of gross profit;

- a significant increase in raw material prices, which resulted in an increase in the Company costs by nearly PLN 5 million, and could be offset only partially by the increase of prices at the Company customers;

- financial costs related to the acquisition of shares in MKF-Folien GmbH and Schimanski GmbH, which amounted to about PLN 1 million in 2007.

Additionally, a delay in obtaining profits of two production investments in Oława Plant (PET banding tapes and the second line for the production of PVC thermoshrink film), which the Company estimates at about PLN 2 million, contributed  to lower financial results achieved in 2007.

At the same time, it should be emphasized that the companies acquired in 2007 achieved a net profit of PLN 9,748,000 in 2007.  Unaudited financial results of Flexergis, Schimanski GmbH MKF-Folien GmbH Minderjahn + Kiefer, acquired by ERGIS-EUROFILMS in 2007 are presented in the table below: 

 

     
[PLN ‘000]Schimanski GmbHMKF-Folien GmbH
2006200720062007
Revenue on sales111,116.98103,181.40153,057.08162,573.84
Operating profit 8,068.178,255.658,296.617,672.45
Gross profit7,066.387,282.725,969.994,793.84
Net profit4,731.454,808.953,548.462,888.45
 
   
[PLN ‘000]Flexergis
20062007
Revenue on sales33,57136,135
Operating profit 2,5693,234
Gross profit2,218.802,821
Net profit1,7212,038.75

   The results can be subject to change after the audit.  

PLANS OF ERGIS-EUROFILMS Within the next few months, ERGIS-EUROFILMS is going to focus on maximising the synergy effects resulting from the acquisition of Flexergis, MKF-Folien GmbH Minderjahn + Kiefer and Schimanski GmbH. The nearest plans of the Group assume first of all the development of sales as regards goods produced by MKF-Folien and Schimanski in the Polish market, as well as the development of sales of products of ERGIS Group including PET tapes, stretch films and laminates for food products), both through the existing distribution network of ERGIS-EUROFILMS and by sales forces of MKF-Folien and Schimanski. ERGIS-EUROFILMS is also going to undertake, in the nearest future, activities aiming at the application of technological synergy effects in order to increase profitability of all companies in the Group.    

ADDITIONAL INFORMATION  

ERGIS-EUROFILMS was created through this year’s merger of the listed Eurofilms S.A. and its trade investor, ERGIS. The merged Company is Poland’s largest and one of Central and Eastern Europe’s leading manufacturers 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 Company is Poland's second 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 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). Additional information is also available at www.ergis-eurofilms.eu 

MKF-Folien GmbH is one of leading German manufacturers of PET and PVC rigid films, used mainly in food industry and in technical sectors. The company production capacity is 20,000 tons of PET film, and 12,500 tons of PVC film.  

Schimanski GmbH is a manufacturer of PET/PE and PVC/PE rigid films laminates, used mainly in food industry (e.g. for packaging meat or cheese, with the annual production capacity of about 16,000 tons.