Largest chemical producer in Romania suspends operations after disappointing H1 results

Chimcomplex (BVB: CRC), the largest chemical group in Romania, controlled by local investor Ştefan Vuza, has informed investors about the temporary closure of production activity of its Borzeşti industrial platform for a period of 14 days starting on August 18, 2022, "taking into account increasing prices for electricity and natural gas", according to a note to investors published today on the Stock Exchange.

At the beginning of the month, the company temporarily closed its other industrial platform located at Râmnicu Vâlcea, until the defects are fixed and the supply of energy and steam is restarted. Thus, the platform was closed for a period of 14 days starting on August 4.

Chimcomplex reported that its profit plummeted in the first half of this year and expects that the negative trend will continue until the end of the year. The company’s net profit shrank by 42% yoy to RON 166 mln (EUR 33.6 mln) in H1, while its turnover increased by 7% to RON 1.2 bln (EUR 243 mln). The expenses rose by 37% to nearly RON 1.2 bln, putting pressure on the net result.

"The financial results are down compared to the same period in 2021 as a result of the alarming increase in electricity and natural gas prices. It is now essential to have the same economic environment as our major European and global competitors, who benefit from much better prices for basic resources. In this way, their products are cheaper and invade the market of Romania and the surrounding countries," the group's representatives said in a press release.

They added: "In this context, the downward trend of our financial results will continue in the second semester of 2022. Like other companies in the industry, we need the intervention of the state to compensate the increased prices for gas and electricity before taking into account the reorganization of production and the optimization of the organizational structure."

The CRC shares are down 21% in 2022, but still hold a gain of over 110% in the last 12 months, according to data on the Bucharest Stock Exchange (BVB). The company's market value of the company is RON 6 bln (EUR 1.21 bln).

(Photo source: the company)