The Group of HELLENIC FABRICS S.A. maintains its leading position in the European market with its excellent reputation and brand awareness, which allow it to successfully face the recession noted in the denim fabric market since the last quarter of 2005.
According to the financial statements, which will be published on 29/11/06, the Group has a very good capital structure, strong cash flow and remains still profitable. In particular, the Group?s positive operating cash flow amounting to Euro 11.9 mln, assisted the liquidity and was used for the reduction of its bank loans, which after the deduction of cash and cash equivalents were lowered by Euro 6.6 mln or 14% approximately, from Euro 48 mln at the end of 2005 to Euro 41.4 mln. The equity-debt ratio amounted to 1.29 versus 1 on 31/12/2005, showing an improvement of 28%.
Consolidated turnover for this nine month period amounted to Euro 62.2 mln, from Euro 63.7 mln in the nine-month period of 2005, reduced by 2.3% approximately. The Group?s main axe of growth is exports, as 76.8% of its sales originate from this activity. Consolidated profit before tax, interest and depreciation (EBITDA) amounted to Euro 7.4 mln, from Euro 12.5 mln in 2005, reduced by 41.2%. Consolidated profit before tax amounted to Euro 1.4 mln from Euro 6.5 mln in the correspondent period of 2005, while net profit after tax amounted to Euro 1.3 mln versus Euro 4.2 mln in 2005, attributable to Euro 0.8 mln to the parent company and Euro 0.5 mln to minority rights. Finally, the "Price to book value" ratio (P/BV) amounted to 0.49.
This year''s Group investments reached Euro 4.2 mln, concluding the 5 years investment program that amounted to Euro 70 mln, through which the entire vertically integrated production process of its plants was renovated and increased their productivity. These investments provide the Group with greater flexibility in the manufacturing of high added value products according to the demands of its customers.
As it is known, this year''s cotton ginning period is developing under particularly unfavourable weather conditions, which will result in the reduction of the country''s seed cotton production by 35%-40% compared to the previous year. Based on this event, the Group has revised its budgeted seed cotton receipts at 30% lower than the original amount, which will affect the efficiency of its cotton ginning plants and its consolidated turnover, but without having a particular effect in the cost of raw material to be consumed by the Group in 2007.
The Company?s Management believes that the Group''s advantages over its competitors and the strong ties developed with its customers will maintain, during a difficult year, its financial figures in satisfying levels.