Shrinking volumes, doubled by price hikes and Ukraine war uncertainties brought the third consecutive quarter of losses for the company. However, say its representatives, March brought an activity rebound against the first two months of 2023.
The company mentions in the reported published at the Bucharest Stock Exchange that turnover dropped amid falling volumes. EBITDA shrank by 42% to RON9 million, but margins are improving from the end of last year.
„In the first quarter of this year, as a continuation of the 2022 approach, we sought an optimal balance between volumes and operating margins, market shares and competitiveness, short-term challenges and long-term development vision. We do not have the performance we have been used to, lately, but we are aware of the impact of the cyclical nature of the economy and the need for time to operationalize new investments. We pay much attention to cost efficiency, but we cannot cancel the impact of inflation,” stated Ioana Birta, CFO of TeraPlast Group.
The company has a RON2 billion capitalization and in 2023 its shares have added 7.3%. the company is 46.8% controlled by businessman Dorel Goia.
„As this year unfolds, we expect a stabilization and improvement in the climate of the markets in which we operate, which will translate into recovery in sales volumes and improvement in operating margins.”, added Birta.
The Installations, Compounds and Recycling segments, with the largest share in the Group’s activity, continue to have satisfactory EBITDA margins considering the economic context, between 9 and almost 10%.
„Through our investment plans involving diversification and streamlining, we seek to deliver solid longterm performance. We do not let the current results discourage us, especially since we are referring to successive periods of record results. We aim for a good mix of activity in several markets that will provide future opportunities and at the same time reduce the Group’s dependence only on certain segments that can suffer temporary shocks. We have a solid business that can adapt to the momentary discontinuities and a management team that has successfully gone through difficult periods before, so it knows what it has to do. We are expanding the business, increasing its geographical footprint, also analyzing M&A operations, to generate long-term added value, something that we know is also desired by our shareholders, who stayed with us even when, at a cursory look, the numbers seem unfavorable” stated Mr Alexandru Stanean, CEO of TeraPlast Group.
TeraPlast Group has planned investments worth 120 million lei this year, which are added to the ones worth almost 400 million lei of the last 5 years. For the project of the new stretch film factory, the actual construction phase of the building has been entered, and the first production line has already been ordered. The construction of the new photovoltaic plant, worth 19 million lei, is still awaiting the approval of financing through the PNRR, and the agreement will be followed by an accelerated implementation of the project.
(English version by Catalina Apostoiu)