Masterplast: Lower Sales and a Loss-making 4th Quarter

As result of the negative economic effects also in connection with construction industry and shrinking markets the building insulation materials firm Masterplast's sales decreased by 17% in Q4 compared to the base period, the company has reported on the website of the Budapest Stock Exchange.

Despite that, during base quarter, Masterplast with strategic inventory had strong position. In the current quarter holding higher inventory level was a disadvantage in market characterized by decreasing prices of raw materials and finished products driven by falling demand.

The actions of market participants in relation to the stock reduction and sales price decrease also made the demand for the Company’s products weaker and resulted lower margins. The other production costs of Masterplast also increase – mainly driven by energy costs. As result of all these effects, the Company Q4 2022 EBITDA was EUR 1 020 thousand (2,7% EBITDA ratio) compared to the base value of EUR 3 624 (EBITDA 8,0% ratio).

Unfavorable exchange rate movements for the Group resulted further lower profits, so the Company closed the last quarter with a loss after tax of EUR 1 385 thousand. On annual basis, the Company's sales revenue increased by 5% and exceeded EUR 200 million due to the strong performance of the construction industry segment, which also compensated the decline in healthcare product sales. The yearly EBITDA (EUR 20 383 thousand, 10,1% EBITDA ratio) of the Company and profit after tax reached higher levels compared to the profit warning presented in January 2023.

Total net profit EUR 15 646 thousand was lower by 3% compared to the base EUR 16 070 thousand. Due to the inventory effect described above, in the first half of 2023 the Company foresees profitability decrease compared to prior based period, but in parallel profit increase is expected after reduction of expensive stocks. The Group already expects a positive growth trend in the second half of 2023, thanks to the new investments already in place and the expected renovation support programs at the European level. The opportunities inherent in the thermal insulation market of the renovation sector ensure Masterplast's growth path in the long term, so the Company continues to implement its strategic major investments.