Μ. Ι. ΜΑΪΛΛΗΣ Α.Ε.Β.Ε.
M.J.MAILLIS GROUP: 9 months 2008 financial results (for the period 01.01.2008 - 30.9.2008).
M.J. Maillis Group announced today the financial results for the 9 months to 30 September 2008:
- Sales: Q3 2008 sales were 88.3 M euro, up 0.7% compared to Q3 2007. Sales for the 9 months to 30 September 2008 were 273.6 M euro, lower by 0,8% compared to the same period of 2007.
- EBITDA: Q3 2008 EBITDA was 5.4 M euro, up by 227% compared to Q3 2007. EBITDA for the 9 months to 30 September 2008 was 15.8 M euro, lower by 15.6% compared to the same period of 2007.
- EBIT: Q3 2008 EBIT was 1.9 M euro, compared to a loss of -1.9 M euro in Q3 2007. EBIT for the 9 months to 30 September 2008 was 4.3 M euro, compared to a loss of -1.3 M euro in the same period of 2007.
- Profit after tax: After tax loss for Q3 2008 was -3.7 Μeuro, lower by 22.4% compared to the after tax loss of -4.8 M euro in Q3 2007. Loss after tax for the 9 months to 30 September 2008 was -11.6 M euro, higher by 9.6% compared to the same period of 2007.
Mr John Kourouglos, CEO of the Group, commented:
The third quarter of 2008 was a period of mixed performance. The first part of the quarter was positively impacted following the implementation of our operational turnaround and recovery strategy. In the second part of the quarter, in line with the general global economic market place, we experienced difficult trading particularly in certain parts of the Group.
Overall demand in basic product categories, mainly steel and film, has dropped and the trend continues. This is caused by a global reduction in demand, coupled with significant inventory reduction by our customers. This de-stocking process is partly driven by the anticipation of even lower raw material prices, which have fallen rapidly since August.
In the markets where we are present, we have not detected any significant change in relative market share. We believe the impact from lower demand and customers de-stocking has been felt by us and our competitors across the markets we serve.
We are taking all necessary steps to adjust to the new market conditions, which we anticipate will persist well into the first quarter of 2009. The processes and structures we have put in place since the beginning of 2008, as well as the strengthening of our management team, puts us in a favorable position to adapt to the new circumstances quickly and effectively, while remaining in a strong position to capitalize on our strong products and markets when demand stabilizes.
Analysing the reported financial statements for the period, Mr Victor Papaconstantinou, Group CFO, noted:
Following a very favourable month of July, sales in August and September were affected negatively by the overall slowing of demand in all industrial markets. Overall sales revenue in Q3 2008 increased by 0.7% compared to the same period of 2007, driven mainly by our machines and tools business, which remains robust (4.6% increase in sales year-on-year in Q3 08) and steel strap products (4.1% increase in sales mainly due to July performance). The increase in steel strap sales in Q3 2008 came from 22.2% lower volumes sold in the period, indicating the positive impact from focusing on higher margin products and segments. Sales of film and plastic strapping products in Q3 2008 were 3.5% and 2.4% lower than the same period of last year respectively, consistent with the trend in the first half of 2008.
Gross profit margin in Q3 2008 was 20.6%, 2.1 percentage points higher compared to the same period of 2007. For the nine month period to 30 September 2008, gross profit margin was 19.9%, compared to 21.5% in the same period of 2007, impacted by the lower profitability recorded in the first quarter of 2008.
Total operating expenses for the first nine months of 2008 were 11.9% lower compared to the corresponding period of 2007, an equivalent reduction of 7.1 M euro (12.6% lower in Q3 2008 compared to Q3 2007). The trend is consistent throughout 2008, while further cost efficiency programmes are being implemented.
Net financing costs of 14.6 M euro for the nine month period to 30 September 2008 are 2.6 times higher than the corresponding period of 2007, reflecting the overall market increase in interest rates and the additional spread paid on our long-term loans throughout 2008 to lenders who have granted us waivers in the period.
Excluding the reclassification of 23.8 M euro of a reverse forfeiting obligation from trade payables to loans, following its re-financing, total working capital as of 30 September 2008 was 9.1 M euro or 8.2% lower compared to 30 September 2007. The reduction partially reflects the unwinding of working capital due to the reducing selling and raw material prices. This unwinding is expected to continue over the next months, given the lower levels of demand and activity. Management is constantly reviewing the valuation of inventory, especially of materials related to our steel products. If the downward trend in market selling prices, combined with the increasing conversion unit cost due to the reduced level of output, persists, there is a possibility that a one-off write-down of inventories in Q4 08 might be necessary. Net debt stood at 241.8 M euro as of 30 September 2008, or 218 M euro excluding the re-financing of the reverse forfeiting obligation, compared to 189.3 M euro on 30 September 2007.
Total capital expenditure in the nine month period to 30 September 2008 was 6.7 M euro, compared to 12.9 M euro during the first nine months of 2007.
Impacted by the recent global economic and market trends, consolidated EBITDA in October 2008 was 0.3 M euro before unrealized foreign exchange losses and other non-cash items of -1.2 M euro. Under these conditions, the Group is preparing and implementing a set of short and medium term action plans, intended to mitigate the impact from the slow down in demand and the scarcity of credit in our markets. These can be classified in four broad categories: production capacity adjustments, operating costs management, working capital improvement and capital expenditure reduction.
Under the current market conditions, the focus is expected to remain on liquidity management and improvement throughout Q4 2008 and Q1 2009. The Group continues to enjoy the support of its lenders, who are continuing to grant waivers to the financial covenants in the relevant loan agreements, on terms similar to those of the previous waivers granted earlier in the year. As previously reported we are in discussions with our banks and note holders for the restructuring of the Group?s debt. These discussions are moving forward satisfactorily.
For more information, please contact our Group?s Investor Relations Department tel. +302106285000 or e-mail investor.relations@maillis.gr
- Sales: Q3 2008 sales were 88.3 M euro, up 0.7% compared to Q3 2007. Sales for the 9 months to 30 September 2008 were 273.6 M euro, lower by 0,8% compared to the same period of 2007.
- EBITDA: Q3 2008 EBITDA was 5.4 M euro, up by 227% compared to Q3 2007. EBITDA for the 9 months to 30 September 2008 was 15.8 M euro, lower by 15.6% compared to the same period of 2007.
- EBIT: Q3 2008 EBIT was 1.9 M euro, compared to a loss of -1.9 M euro in Q3 2007. EBIT for the 9 months to 30 September 2008 was 4.3 M euro, compared to a loss of -1.3 M euro in the same period of 2007.
- Profit after tax: After tax loss for Q3 2008 was -3.7 Μeuro, lower by 22.4% compared to the after tax loss of -4.8 M euro in Q3 2007. Loss after tax for the 9 months to 30 September 2008 was -11.6 M euro, higher by 9.6% compared to the same period of 2007.
Mr John Kourouglos, CEO of the Group, commented:
The third quarter of 2008 was a period of mixed performance. The first part of the quarter was positively impacted following the implementation of our operational turnaround and recovery strategy. In the second part of the quarter, in line with the general global economic market place, we experienced difficult trading particularly in certain parts of the Group.
Overall demand in basic product categories, mainly steel and film, has dropped and the trend continues. This is caused by a global reduction in demand, coupled with significant inventory reduction by our customers. This de-stocking process is partly driven by the anticipation of even lower raw material prices, which have fallen rapidly since August.
In the markets where we are present, we have not detected any significant change in relative market share. We believe the impact from lower demand and customers de-stocking has been felt by us and our competitors across the markets we serve.
We are taking all necessary steps to adjust to the new market conditions, which we anticipate will persist well into the first quarter of 2009. The processes and structures we have put in place since the beginning of 2008, as well as the strengthening of our management team, puts us in a favorable position to adapt to the new circumstances quickly and effectively, while remaining in a strong position to capitalize on our strong products and markets when demand stabilizes.
Analysing the reported financial statements for the period, Mr Victor Papaconstantinou, Group CFO, noted:
Following a very favourable month of July, sales in August and September were affected negatively by the overall slowing of demand in all industrial markets. Overall sales revenue in Q3 2008 increased by 0.7% compared to the same period of 2007, driven mainly by our machines and tools business, which remains robust (4.6% increase in sales year-on-year in Q3 08) and steel strap products (4.1% increase in sales mainly due to July performance). The increase in steel strap sales in Q3 2008 came from 22.2% lower volumes sold in the period, indicating the positive impact from focusing on higher margin products and segments. Sales of film and plastic strapping products in Q3 2008 were 3.5% and 2.4% lower than the same period of last year respectively, consistent with the trend in the first half of 2008.
Gross profit margin in Q3 2008 was 20.6%, 2.1 percentage points higher compared to the same period of 2007. For the nine month period to 30 September 2008, gross profit margin was 19.9%, compared to 21.5% in the same period of 2007, impacted by the lower profitability recorded in the first quarter of 2008.
Total operating expenses for the first nine months of 2008 were 11.9% lower compared to the corresponding period of 2007, an equivalent reduction of 7.1 M euro (12.6% lower in Q3 2008 compared to Q3 2007). The trend is consistent throughout 2008, while further cost efficiency programmes are being implemented.
Net financing costs of 14.6 M euro for the nine month period to 30 September 2008 are 2.6 times higher than the corresponding period of 2007, reflecting the overall market increase in interest rates and the additional spread paid on our long-term loans throughout 2008 to lenders who have granted us waivers in the period.
Excluding the reclassification of 23.8 M euro of a reverse forfeiting obligation from trade payables to loans, following its re-financing, total working capital as of 30 September 2008 was 9.1 M euro or 8.2% lower compared to 30 September 2007. The reduction partially reflects the unwinding of working capital due to the reducing selling and raw material prices. This unwinding is expected to continue over the next months, given the lower levels of demand and activity. Management is constantly reviewing the valuation of inventory, especially of materials related to our steel products. If the downward trend in market selling prices, combined with the increasing conversion unit cost due to the reduced level of output, persists, there is a possibility that a one-off write-down of inventories in Q4 08 might be necessary. Net debt stood at 241.8 M euro as of 30 September 2008, or 218 M euro excluding the re-financing of the reverse forfeiting obligation, compared to 189.3 M euro on 30 September 2007.
Total capital expenditure in the nine month period to 30 September 2008 was 6.7 M euro, compared to 12.9 M euro during the first nine months of 2007.
Impacted by the recent global economic and market trends, consolidated EBITDA in October 2008 was 0.3 M euro before unrealized foreign exchange losses and other non-cash items of -1.2 M euro. Under these conditions, the Group is preparing and implementing a set of short and medium term action plans, intended to mitigate the impact from the slow down in demand and the scarcity of credit in our markets. These can be classified in four broad categories: production capacity adjustments, operating costs management, working capital improvement and capital expenditure reduction.
Under the current market conditions, the focus is expected to remain on liquidity management and improvement throughout Q4 2008 and Q1 2009. The Group continues to enjoy the support of its lenders, who are continuing to grant waivers to the financial covenants in the relevant loan agreements, on terms similar to those of the previous waivers granted earlier in the year. As previously reported we are in discussions with our banks and note holders for the restructuring of the Group?s debt. These discussions are moving forward satisfactorily.
For more information, please contact our Group?s Investor Relations Department tel. +302106285000 or e-mail investor.relations@maillis.gr