TeraPlast Group’s turnover increased by 25 percent in the first nine months of 2022

The turnover of the TeraPlast Group between January and September 2022 reached the level of 563.6 million RON, increasing by 25 percent compared to the same period last year.

The EBITDA for the three quarters stood at 48.5 million RON, down by 25 percent compared to the record results of the first nine months of 2021.

The Group’s result is still burdened by the operational losses of the Flexible Packaging segment, specific to the start-up period, but also influenced by the long process of product approval by the customers, in a climate of reduced private consumption, the company says.

The volume of exports increased in the first nine months by 51 percent compared to the same period of the previous year, and the share in the total turnover rose to 16 percent, from 13 percent, the level reached in the period January-September 2021.

The Installations business line continues to grow, even in the context of delays in the start of new public infrastructure projects. This business maintained a double-digit EBITDA margin of 11.5 percent. At the same time, the evolution is positive, +6 percent compared to the historical record level registered in the same period last year.

The Compounds segment, which also includes recycled compounds, recorded lower volumes and experienced pressure on sales prices, reflected in the evolution of the EBITDA margin (-43 percent). In this context, strengthening the market share and maintaining long-term relationships with contractual partners are priorities for this segment.

TeraGlass experienced an improvement in operational performance in the third quarter. For the July-September period, EBITDA stood at 0.76 million RON, which brought the result to positive territory for the first nine months of this year. The improvement in margins came from the renegotiation of contract prices that became effective at the end of H1.

The Flexible Packaging segment, new within the Group, is experiencing an increase in sales, but still insufficient to counteract the operational losses due to the reduced load of production capacities and product approval expenses by potential customers.

The net profit recorded in the first nine months was of almost 16.4 million RON, down 62 percent compared to the same months in 2021. The comparison is made with an exceptional result recorded last year, exceeding the expectations of the moment. The significant gap between the evolution of operational performance and that of net profit was determined by the significant increase in interest rates, at a time when the Group invested 70 million RON to complete projects started last year and supported the increase in working capital required for new products.

„The results still bear the imprint of the volatile context we are going through, and which presents uncertainties for the next period. Even in such a climate, we managed to maintain the Group’s performance at a satisfactory level. The record growth we experienced in previous years has moderated, but through effective management and prompt response to difficulties, we maintain the resilience of the Group to deliver performance in line with the great economic challenges at hand.

The challenges remain constant and even if we see some improvements, such as the supply chains or the prices of raw materials, new tensions arise like the energy crisis or restrictive monetary policies”, stated Ioana Birta, chief financial director of the TeraPlast Group. “Unfortunately, we cannot change such a trajectory by ourselves. Therefore, we are focusing on consolidating market share and on the opportunities that arise during this period. We see both increased dynamism in the M&A area and increased interest from foreign markets in our products. We are not abandoning any significant investment plans because we want to be in a position to make the most of the next wave of economic activity when the waters settle.”