(Alliance News) - Sabaf Spa reported Thursday that net income for the first quarter dropped to EUR1.4 million from EUR4.6 million in the fourth quarter and EUR7.5 million in the first three months of 2022.

In the first quarter, the Sabaf group posted sales revenue of EUR58.1 mln, 13 percent higher than EUR51.4 mln in the fourth quarter of 2022 but down 18 percent from EUR70.9 mln in the first quarter of 2022.

"The global home appliance market continues to go through the phase of economic weakness manifested in the second half of 2022. Despite the context, the sales achieved by the Sabaf group in the quarter show a clear recovery trend compared to the figure for the latter part of 2022, also due to the gradual depletion of destocking along the sector's supply chain," the company explainedot.

Normalized Ebitda for the first quarter was EUR7.1 million and up 17 percent from EUR6.1 million in the fourth quarter of 2022 but down from EUR13.1 million in the first quarter. The group partially benefited from lower energy and raw material costs compared to the previous quarter; however, the still significantly lower than normal activity levels did not allow a return to usual levels of profitability.

Normalized Ebit was EUR2.9 million, 70 percent higher than EUR1.7 million in the fourth quarter of 2022 and down from EUR9.2 million in the first quarter of the previous year.

In the quarter, EUR5.4 million was invested compared to EUR5.8 million in the first quarter of 2022 and EUR20.9 million in the full year 2022, with the largest share going to the startup of the Mexican plant, scheduled for next June.

As of March 31, 2023, net debt was EUR86.4 million, of which EUR2.6 million related to financial liabilities recognized in accordance with IFRS 16, from EUR84.4 million as of December 31, 2022, and EUR75.5 million as of March 31, 2022, against equity of EUR159.6 million.

"Despite a weak market environment, more favorable sales and order trends are expected in the second quarter of 2023. In addition, contributions from the start of the first sales of induction cooking components and from the production of the new plants in India and Mexico will be visible in the second half of the year," the company explained.

"As sales volumes stabilize, the group expects a recovery in profitability, made possible by lower energy and raw material prices, as well as efficiency actions on operating costs."

Sabaf's stock is down 0.1 percent at EUR16.08 per share.

By Giuseppe Fabio Ciccomascolo, Alliance News senior reporter

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