Boryszew Group results stable after Q3 2018

After the first three quarters of 2018, the revenues of Boryszew Group amounted to PLN 4.7 billion while the net profit exceeded PLN 150 million. Boryszew Group’s consolidated EBITDA stood at PLN 311 million – with the Metals Segment having the largest share in it (PLN 226 million) and at the same time generating the most revenue (PLN 2.9 billion).

After nine months, the Group’s strongest results were achieved in the Metals Segment where YoY revenue increased by 1.4% to PLN 2.9 billion. An improvement of EBITDA results was also recorded, totalling PLN 226 million (increase by 4.6%), parallel to an increase of EBITDA margin to 7.9%.

“Our results after three quarters remain stable, despite a generally less optimistic mood than in the corresponding period of 2017. We have maintained accrued revenues at a slightly higher level than last year but the drop in turnover in Q3 2018 in the Automotive Segment had a negative impact on the EBITDA result in this period. At the end of September, the Metals Segment showed the best results and outlook,” said Piotr Lisiecki, CEO and President of the Management Board of Boryszew Group.

In Q1-Q3 2018, the Group generated positive cash flows from operating activities which were allocated to investments and servicing external debt. The lower level of flows from operating activities was caused mainly by a nominal increase in investment in working capital as a result of increased sales, metal prices as well as building up stocks in connection with the events on the aluminium market and producing injection moulds in order to carry out new nominations in the Automotive Segment.

The situation on the automotive market in the third quarter of the current year was not favourable for Boryszew Group. In September, the number of new car registrations from the VW Group fell significantly (-23.5% YoY) despite a moderate upward trend in the first half of the year. The drop in revenue in the Automotive Segment was mainly caused by a one-off market event – a new test procedure for harmonising fuel consumption and exhaust emission (known as Worldwide Harmonised Light Vehicles Test Procedure or WLTP) whose impact on the Group’s Q3 revenue is estimated at PLN 57 million.

“The European Commission has replaced the hitherto used NEDC cycle for testing combustion and emission of harmful substances with WLTP which has led to a significant drop in new car registrations. We do, however, expect positive changes in this area in a medium to long term perspective – for example our key client, the VW Group, has announced significant investments in the electric car segment. Electromobility Centres will be set up, among others, in the Zwickau, Emden and Hannover facilities which are natural recipients of our production plants,” said Cezary Pyszkowski, Vice-President of Boryszew S.A. responsible for the Automotive Segment.

In Q1-Q3 2018, the companies Boryszew Automotive Plastics and Maflow obtained new contracts worth over EUR 270 million, which will be carried out until 2028.

“The impact of new nominations on revenues will become visible already in 2019. At present the new projects are in the project development stage and in the next step they will be implemented to series production. The resources of our companies from the automotive segment are strongly engaged in this demanding process,” Cezary Pyszkowski added.

The situation on the market for aluminium products, whose range of applications in many sectors of the economy is growing, is favourable for Boryszew Group. The revolution in the automotive sector is leading to light materials, including precisely aluminium, being used more widely, which means opportunities for further growth of the Metals Segment.