9M 2007 results confirm the turnaround of CARDICO Group
CON. CARDASSILARIS & SONS S.A. Group announced its financial results for the nine month period of 2007 according to International Financial Reporting Standards.
9M 2007 results totally confirm the turnaround of the Group with profitability standing at satisfactory levels, taking into account the special conditions during 2006 and the first months of 2007, regarding the sharp and not expected decline in Cardico's raw material prices as well as the strike mobilizations that took place in the Piraeus Port Authority
More specifically, 9M 2007 consolidated turnover stood at ? 100.4 mil. over ? 131 mil. in the respective period last year, decreased by 23.4%. The decrease in the raw material prices (average major raw material prices for the nine month period of 2007 decreased by about 30% compared to the respective period last year) consist the main reason for the decrease of sales, whereas it is worth noting that sales in terms of volume increased in the same period, a fact that demonstrates the growth trend of the Group. Moreover, the 3rd quarter is characterized historically by low commercial activity, due to the decreased demand for nuts during the summer season.
Regardless of the decrease in sales, consolidated gross profit increased by 69.7% and amounted ? 11.5 mil. over ? 6.8 mil. in the nine month period of 2006. The increase in gross profit is attributed to the more efficient use of the Group's facilities, which are amongst the most modern in Europe, as well as to the enhancement of activity with new contracts with industries, which is a higher profit margin business unit. The Company's management in spite of the order cancellations by its customers which had a negative effect in its financial results in the short-term, decided to execute all the order contracts during the period of the drop of the almond kernel price and hence has now become the preferred client of the big nut producers in America. As a result CARDICO is able to set contracts for large quantities at most favorable terms than its competitors can achieve.
As regards the operating profitability, Group EBITDA stood at Euro 3.8 mil. over Euro 45 thou. in the respective period last year, marking an impressive increase. This increase in the operating profits is attributed not only to the abovementioned factors but also to the outcome of the Group's restructuring program which are now evident. More specifically, the 2007 nine month period figures illustrate reduced selling and administrative expenses by 5.2%. Respectively
As well, the remaining profitability figures had a positive course with earning before interest and tax (EBIT) amounting to Euro 2.6 mil. over losses of Euro 1.1 mil. in the nine month period of 2006. In addition the company aims at decreasing the cost of financing by reducing bank debt using the proceeds from the sale of non core assets that are not put to use in the production process, as well as form the improvement in the cash flows.
Finally, consolidated results before taxes amounted to profits of Euro 1.3 mil. in the nine month period of 2007 over losses of Euro 2.5 mil. in the respective period last year, while results after taxes and minorities amounted to profits of Euro 728 thou. over losses of Euro 2 mil. in the nine month period of 2006.
The nine month period results confirm CARDICO's recovery course, which is expected to continue, particularly within the last quarter of the current fiscal year, which is a period historically characterized by increased commercial activity for the Group. As it is already illustrated by data up to date, the company, despite the significant decrease in raw material prices, will increase its turnover, due to the significant increase in sales volumes. A significant increase in the last quarter of 2007 is also expected in the profitability of the Group, by achieving sales that ensure satisfactory profit margins.
After a year of reconstruction for the Group, the growth course marked in the last months of 2007 is estimated to sustain in 2008. Within the next fiscal year the Group is expected to mark increased sales and profitability through the capitalization of its strong commercial presence, the restoration of the relationships with its clients, the support from its core suppliers from the USA and the full implementation of its restructuring plan, as regards its organizational and financial structure.
The Nine-Month Data and Information, the Interim Financial Statements and the IR RELEASE have been posted on the company's website www.cardico.com