In the first six months of 2022, the company’s revenues amounted to RON83.4 million, from around RON67 million last year, hence a 25% advance, mainly due to the increase in the selling price of products, amidst the accelerated increase in raw material prices starting from March 2022.
EBITDA hit RON6.7 million, up 11%.
The company’s expenses increased, compared to the first half of 2021, in a higher proportion (+25%) than the increase in revenues, influenced by the increase in the cost of raw materials, at an accelerated pace, the increase in the prices of utilities and other materials, the increase in salaries due to staff fluctuations and inflation, and the cost of services due to the contracting, due to lack of staff, of some cutting/machining and welding work with third-party companies. Other costs have fallen slightly or remained at the same level.
In order to cover the price risk generated by the increase of the basic raw material, the metal, the company has written, in the commercial contracts concluded with the clients, a protection clause that allows it to update the sale price if the price of the basic raw material increases. The company also has a material procurement policy that provides protection for a period of 2-3 months for confirmed orders, which provides us with a buffer interval for the period in which we are repositioning ourselves with respect to suppliers and customers.
In the current economic context marked by political and economic instability, generated by the conflict in Ukraine, there is also a significant risk related to the price of utilities, especially electricity and gas, for which the company has identified several solutions to cover the risk, i.e. investments in a photovoltaic system that covers our own energy consumption in proportion to 45% and an in-house heating system with radiant tubes, based on energy produced from pellets.
The company’s stock has lost 7.8% since the start of the year amid deals of around RON75,000. The company is worth RON37.3 million and is 81% controlled by Uzinsider group.
(English version by Catalina Apostoiu)