Thrace Plastics: Reduced sales and profits in the nine months

Turnover from continuing activities of €316.1 million is shown by the Thrace Plastics group in the nine-month results, reduced by 7.5% compared to the sales of the nine-month period of the previous year, which amounted to €341.6 million. Profit before Taxes (EBT) from continuing operations amounted to €32.2 million compared to €81 million in the nine months of 2021, due to the significant reduction in sales of protection products from COVID-19, as indicated in the announcement of the listed company.

Of the €32.2 million, €22.3 million concern the traditional product portfolio, €5.3 million concern sales of products related to personal protection from COVID-19, while extraordinary profits amounted to €4.6 million. Compared to pre-pandemic levels, i.e. to the nine months of 2019, where there is direct comparability, Profits before Taxes (EBT) from the traditional product portfolio show an increase of 89.4%, demonstrating the significant increased profitability, despite the extremely negative conditions that prevailed in the global market in the Nine Months of 2022, the reduced demand and the extremely increased costs of raw materials, energy and transport.

During the third quarter of 2022 the following was observed:

• Steady demand for construction industry products.

• Steady demand for products aimed at the infrastructure and major projects sector.

• Demand lag in most products of the agricultural sector.

• Steady demand for products aimed at the packaging sector.

• Significantly reduced demand for products related to the COVID-19 pandemic.

• Limited drop in the cost of raw materials.

• Significantly increased energy costs, in all the Group’s countries of operation with significant fluctuations from month to month.

• Steadily increased transport costs, with little escalation on specific routes.

• Significantly increased cost of raw materials and packaging materials.

With regard to the outlook for the rest of the year, the Management is closely monitoring macroeconomic developments, on a global scale, which are still characterized by significantly increasing inflationary trends, throughout the economy, but also in all the costs that make up the cost base of the industry and the continued slowdown in demand, which continues to significantly worsen the economic environment.

Financial results for the first nine months of 2022

With reference to the fourth quarter of 2022, the Group’s Management monitors changes taking place at the macroeconomic level and adapts to these as far as possible, and to the clearly more difficult conditions, compared to the previous months of the year, taking measures to achieve the best possible economic performance, while managing the resulting operational risks.

However, the high levels of inflation, the significant decline in demand, as a result of uncertainty and the attempt to reduce stocks on the part of customers and the extremely high cost of energy, are factors that are outside the Group’s sphere of influence and make for a very difficult financial environment. Therefore, for the fourth quarter, as expected and due to the seasonality of the branches of activity, a lower profitability is estimated, compared to the previous quarters of the year.

It is noted that in any case, the last quarter of the year is traditionally the weakest quarter in terms of profitability. Therefore, a relatively small deviation from the budget target is estimated regarding the level of Profits before Taxes from the traditional portfolio (€25 million), however the annual profitability will remain at significantly higher levels, being more than double the previous pandemic levels, while total Profits before Taxes will far exceed expectations, highlighting once again the Group’s dynamics and prospects.