ARLA PLAST AB STABLE CLOSE TO A SUCCESSFUL YEAR
OCTOBER -
- Sales volume amounted to 4,328 tonnes (4,124 tonnes) an increase by 5%.
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Net sales amounted to
SEK 226.6 million (SEK 232.0 million ), a decline by 2%. The organic decline was 3%. -
Operating profit amounted to
SEK 16.0 million (SEK 11.3 million ), an increase by 42%. - The operating margin increased to 7.1% (4.9%).
-
Profit for the period amounted to
SEK 9.1 million (SEK 8.6 million ) an increase by 6%. -
Earnings per share before dilution amounted to
SEK 0.43 (SEK 0.43 ), and after dilution toSEK 0.43 (SEK 0.41 ). -
The cash flow from operating activities amounted to
SEK 78.6 million (SEK 51.3 million ).
january -
- Sales volume amounted to 19,232 tonnes (18,657 tonnes) an increase by 3%.
-
Net sales amounted to
SEK 1,015.1 million (SEK 957.8 million ), an increase by 6%. The organic decrease was 3%. -
Operating profit amounted to
SEK 91.6 million (SEK 47.0 million ), an increase by 95%. - The operating margin increased to 9.0% (4.9%)
-
Profit for the period amounted to
SEK 66.9 million (SEK 34.4 million ), an increase by 94%. -
Earnings per share before dilution amounted to
SEK 3.29 (SEK 1.72 ), and after dilution toSEK 3.19 (SEK 1.64 ). -
Net cash amounted to
SEK 81.3 million (SEK -76.7 million ) at the end of the period, 0.6 times (-0.9 times) EBITDA. -
The cash flow from operating activities amounted to
SEK 165.5 million (SEK 86.7 million ). -
The Board proposes a dividend of
1.25 SEK per share (1 SEK per share), equivalent to 39 percent (58 percent) of net profit.
The market
The positive market development has continued into the fourth quarter, although demand moderated somewhat towards the end of the year. Demand from the construction industry remains weak overall, but we have observed continued strong growth in several other sectors, especially within application area industry and industrial projects. Our perception is that we maintain our market position in
Prices of raw materials, which affect both net sales and gross profit, continued to decline during the fourth quarter before leveling off. Global demand for raw materials has been weak, resulting in currently good supply. However, we have begun to see trends of capacity reduction in the supply chain, which together with disruptions in the logistics chain may lead to an upward turn in raw material price development.
Positive profit development despite decreased net sales
Our sales volumes increased by 5 percent compared to the corresponding period previous year, while net sales decreased by 2 percent. The increased volumes, product mix, and currency effects positively impacted net sales, while lower raw material prices counteracted. The trend of economic challenges in specific product areas such as PETG and MWPC continues, while demand from application area industry and industrial projects is more favorable, as evidenced by an increased share of OPC sales.
The operating profit for the fourth quarter amounted to 16.0 MSEK, which is a significant improvement compared to the same period the previous year. In the somewhat subdued market conditions and downward price development, we have managed to defend our gross margins. The product mix has been favorable, and our initiatives for more efficient material usage have given results, contributing to the improved outcome.
During 2023, we have maintained a consistently lower level of working capital, and the cash flow is a result of the increased operating profit and our efforts to optimize capital utilization, especially in inventory. The strong cash flow has enabled us to further reduce our net debt to a net cash position of 81.3 MSEK.
Full year
After a long period of declining volumes in the industry, demand turned upwards again in the second half of 2023. For the full year, this meant a volume increase of 3 percent. Net sales increased by 6 percent positively influenced by a favorable product mix and acquisition, while low raw material prices had the opposite effect.
Both gross and operating margins improved and cash flow strengthened thanks to targeted sales efforts, streamlined operations and reduced capital utilization. We have also prioritized our sustainability initiatives with activities to increase awareness and recycling rates of materials in the supply chain. Investments have been modest as we plan for modernization of our facility in Kadaň and the construction of a new warehouse in Borensberg in the coming years.
Well prepared for 2024
It is positive that market demand has stabilized and is stronger now than the previous year. Looking ahead, we see a continued consolidation of actors and it is difficult to predict how it will affect the market. We will maintain our long-term focus while flexibly addressing short-term challenges.
The results for 2023 are something to be proud of. We have significantly strengthened our company, made it more sustainable, and achieved one of our best financial results ever. I want to thank all dedicated employees for their efforts which have made this possible.
President and CEO
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Forward-looking information
Certain statements in this report are forward-looking and the actual outcome may be significantly different. In addition to the specific mentioned factors, other factors may have material impact on the actual outcome. Such factors include, but are not limited to, the general economic climate, exchange rate fluctuations and changes in interest rates, political developments, the impact of competing products and the prices of such products, interruptions to the access to raw materials.
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