Masterplast Reports Falling Q1 Revenues

As a result of the significant decline in the construction market and lower demand, the building insulation materials firm Masterplasts's revenue decreased by 27% compared to base in the first quarter.

According to the company report published on the website of the Budapest Stock Exchange, in the sharply competitive market, Materplast was only able sell its finished-products with reduced margins, produced from previously purchased raw materials at higher prices.

Besides, the lower utilization of production capacities also had a negative impact on profitability. As a result, the company's EBITDA for the first quarter represents a loss of EUR 2,032,000 (EBITDA margin of -5,4%). Unfavorable exchange rate movements for the Group further increased the loss, so the company closed the first quarter with a loss after-tax of EUR 5,837,000.

In response to the changed market conditions, the company focused on reducing operating costs, optimizing production and inventory levels, and more efficient energy management. The company has restructured its management, reviewed its processes and launched significant staff optimization in the manufacturing and the operations. The company expects a significant improvement from the second half of the year, where – probably strengthened by the start of the European-level energy efficiency building renovation wave – the industrial environment may intensify and the efficiency measures taken by the company would have a positive impact. In line with the listed impacts, the company revised its EBITDA earnings forecast for financial year 2023 to EUR 8 million.

With the EU measures in line with the EU's energy policy objectives (REPowerEU plan; "Fit for 55%" measure package), the company's medium-term business prospects in the thermal insulation market have strengthened.

According to the company's updated medium-term profit forecast, Masterplast could return to its original growth path from 2024, and by 2026 the annual profit after tax can exceed EUR 30 million. Based on these, the company continues to implement the intensive investment strategy that lays the foundation for the growth path.