In Q3 2020, Boryszew Group (“Boryszew”) generated consolidated revenues of PLN 1.4 billion, with the consolidated EBITDA, excluding one-off provisions, of PLN 102 million. Remedial measures taken in previous quarters and implemented optimisation processes translated into a higher EBITDA margin y/y. The Group also recorded a considerable rise in consolidated net profit to PLN 38 million and improved the efficiency of working capital management.
Amid the global economic slowdown caused by the COVID-19 pandemic, Boryszew Group generated very strong performance across all business segments.
Despite the general global downward trend in the automotive industry, Boryszew Group’s Automotive Segment performed significantly better relative to the rest of the market, managing to keep its revenues at a similar level compared to Q3 2019. In this segment of operations, Boryszew’s revenues amounted to PLN 426 million, while EBITDA was PLN 26.3 million.
“The global automotive industry has been badly hit by the pandemic. After a difficult second quarter, when new passenger car registrations in Europe more than halved, the sector went on to recover markedly in the third quarter, albeit not to pre-COVID-19 levels. I am very pleased that, despite the unfavourable market conditions, our Automotive Segment managed to generate such high EBITDA, all the more so as the third quarter always includes summer factory downtime,” said Piotr Lisiecki, President of the Board and CEO of Boryszew S.A.
The Q3 2020 revenues of Boryszew Group’s Metals Segment amounted to PLN 922 million, while the Segment’s EBITDA rose by more than 16% over the corresponding period last year. Particularly noteworthy is a considerable effectiveness improvement in Alchemia Group, which, despite lower revenues than a year before, recorded a rise in EBITDA to PLN 20 million. However, an important development for this Segment was the decision of Head of the Malopolska Region Customs and Tax Office in Krakow, issued on 24 September 2020, concerning potential VAT arrears of the Boryszew Group company ZM Silesia, which prompted a review of all risks related to the ongoing tax proceedings in the Group. Following the review, a non-cash tax provision of PLN 223.5 million was recorded.
“The Tax Office’s decision is not binding and therefore not enforceable. We have lodged a comprehensive appeal against it and intend to exhaust all available legal avenues to defend our interests. The recorded provision does not directly affect the Group’s liquidity. We are convinced that further proceedings will lead to a decision favourable for Boryszew,” Piotr Lisiecki commented.
In the Chemicals Segment, Boryszew Group continued to extend the ERG CleanSkin product line of virucidal disinfectants by adding a new product, ERG CleanSkin FUN, for children and teenagers. Also, a new sales strategy for the Borygo brand was implemented. In this segment of operations, Boryszew posted revenues of PLN 49 million while the Segment’s EBITDA rose to PLN 4.7 million.
In Q3 2020, Boryszew Group managed to improve its working capital ratios q/q. As compared to Q2, the net working capital was reduced by over 8%. Also, the level of inventories was lowered.