Frigoglass – Increase in sales and losses in the second quarter

Frigoglass recorded an increase in sales, but also an increase in losses in the second quarter of the current year, according to its financial statements.

In particular, the company in the second quarter of the year shows a sales increase of 45% as a result of the lifting of restrictive measures and the low comparative base, while at the same time it showed losses of 12.24 million euros from losses of 3.85 million euros in the second quarter of 2020.

In detail, as it announced there was:

– Increase of sales of the Glass Sector by 67% on a neutral exchange rate, due to the recovery of sales volume and the increase of prices in all activities. Sales increase by 36.5% on a published basis.

– Improvement of the EBITDA margin by 200 basis points to 14.1% mainly due to better cost absorption and price increase initiatives.

– The fire in the Frigoglass factory in Romania resulted in the write-off of assets and expenses of € 13.8 million.

Immediate implementation of the business continuity plan to reduce the impact of the fire by directly increasing production in Russia and operating an assembly line in Romania at the beginning of the fourth quarter.

– € 61.2 million in cash and € 13 million in available credit lines at the end of June, sufficient to cover financing costs and working capital requirements in 2021.

– Successful completion of capacity building and modernization of a kiln in Nigeria in June despite the challenges associated with the COVID-19 pandemic.

Mr. Nikos Mamoulis, CEO of Frigoglass, commented:

“The results of the second quarter are satisfactory and show a clear recovery of demand in many of our markets. We expect the upward trend in demand to continue for the rest of the year, although the effects of the fire on our plant in Romania will affect the Commercial Refrigeration industry. We are grateful that there were no casualties from this unfortunate incident. Despite the challenges, we expect to achieve sales growth and EBITDA in 2021. ”

Prospects

Despite the uncertainty about the global economic recovery in 2021, we remain optimistic due to our performance in the second quarter, which reflects the significant improvement of our customers’ investments in professional refrigerators and the increase of sales volume in the Glass industry, management pointed out.

This year our performance will be affected by the cessation of production in Romania as a result of the fire in our factory. Despite the challenges, we expect increased sales in the Commercial Refrigeration sector, driven by the higher consumption of soft drinks and beverages in many of the European markets and the successful implementation of our customer-centric innovation strategies. Sales growth will be boosted by our growing market share in Africa and Asia as a result of our trade initiatives.

The recent expansion of Frigoserve in Switzerland and our commitment to growing our customer base in Central Europe will make a positive contribution to this year’s sales growth. In the Glass industry, the completion of the kiln reconstruction project before the scheduled date reduced the impact on sales. Due to the increase in sales volume, which continues in July, we expect double-digit sales growth in the Glass sector for 2021.

In order to reduce the impact of the cessation of production of the Romanian plant, the business continuity plan was implemented immediately. As our plant in Russia enters the least intensive period of the year, we are able to cover most of the production of the Romanian plant. With the aim of a smooth transition, we have ensured the availability of raw materials at our factory in Russia. At the same time, we are setting up a limited assembly line at a leased industrial site near the Romanian facility, which is expected to be operational in the fourth quarter of 2021. The final phase of our project envisages the reconstruction of the plant in Romania. In this context, discussions with contractors and suppliers have progressed, with the aim of starting the project in September.

Based on our current estimate, the plant is expected to be operational in the last quarter of 2022. The payment of compensation by insurance companies is crucial for the successful and timely completion of the construction phase.