Romania’s TeraPlast Group net profit drops 64% in 2022

BUCHAREST (Romania), February 1 (SeeNews) - Romania’s TeraPlast [BSE:TRP], the parent company of local construction materials manufacturer TeraPlast Group, said on Wednesday that the group’s preliminary net profit fell by 64% on the year in 2022, to some 15.4 million lei ($3.4 million/3.1 million euro).

The net profit decrease was driven by depreciation costs, set against the backdrop of increases in investments and the group’s asset base, as well as a rise in interest rates on loans in local currency, which translated into additional expenses of 8.3 million lei compared to 2021, the group said in a statement filed with the Bucharest Stock Exchange.

In 2022, TeraPlast Group’s turnover increased by an annual 16% to 711 million lei, while earnings before interest, taxes, depreciation and amortisation (EBITDA) were down 29%. EBITDA was set back by the volatility of raw materials prices and an underestimated level of water and sewage works financed from European and public funding.

The Installations and Recycling segment saw a 20% annual increase in turnover. It contributed 68.6% of the group’s total turnover.

“Although the turnover of the Installations segment increased due to inflation, volumes stagnated compared to 2021, which generated pressure on the margin, respectively the partial transfer of costs to the market,” TeraPlast said.

The turnover in the Compounds and Recyclings segment decreased by 15% to 126 million lei in 2022, while EBITDA dropped by 53% due to increased energy costs and significant differences between raw materials' prices in the EU, including Romania, and those outside the European Union.

The Windows and Doors business line saw its turnover rise by 30% to 56.5 million lei, bolstered by an increase in sales volumes.

The turnover of the Flexible Packaging segment jumped by 130% on the year to 40.3 million lei in 2022, while its EBITDA decreased by 11.2% as the segment was burdened by a lack of optimal loading in production lines and quantities produced in 2022 were at half of the production capacity.

The group’s major investments during 2021 and 2022 amounted to 219 million lei and aimed at diversifying its lines of work and geographical footprint, while increasing energy independence and substituting virgin raw materials with recycled material.

For 2023, TeraPlast Group is targeting a turnover of 848 million lei and EBITDA of 75 million lei, jumping by an annual 19% and 42%, respectively. In terms of investments, TeraPlast is planning to commit 102 million lei in 2023, most of which will be directed at a new factory for stretch films and a new photovoltaic plant.

Blue-chip TeraPlast's shares traded 2.76% lower at 0.6 lei as at 1040 CET on Wednesday on the Bucharest bourse.

(1 euro=4.9221 lei)