TeraPlast reports "relatively similar" results amid “challenging” environment in 2023

Although Romanian polymer processor TeraPlast Group (BVB: TRP) announced a moderate 3% y/y decline in its EBITDA last year, the profit from operations contracted by 30% y/y and the bottom line shrunk more than tenfold y/y resulting in a 0.2% net profit margin (2.2% in 2022) – which may have had a contribution to the 4.4% y/y drop in the company’s shares listed at the Bucharest Exchange.

The financial results of TeraPlast Group in 2023 bear the imprint of a macroeconomic environment filled with challenges, the company’s management said, however, pointing to some positive developments.

The company’s revenues decreased by 5% y/y to RON 672 million (EUR 135 million) in 2023, dragged down by the 40% plunge in the sales of compounds (plastic pellets used by other processors) and also by the 14% decline in the sales of plastic windows (the decline was -40% for the retail segment).

The business line dealing with the plastic pipes (installations) – the most significant in terms of revenues – posted a moderate 3% y/y advance to RON 501 million (just over EUR 100 million) and is expected to remain a key driver partly as a result of the Group’s two takeovers (in Moldova and Hungary) but also thanks to the domestic market.

The company’s net profit has reached an insignificant value of RON 1.1 million (EUR 220,000), down from a more decent, but not outstanding, RON 15.3 million in 2022. Indeed, the bottom line was impacted by the deferred tax, but the gross profit has also contracted three-fold to RON 5.2 million (some EUR 1 million).

Regarding the positive developments in 2023, compared to 2022, TeraPlast pointed to the EBITDA margin, which slightly increased to 7.6% at the group level while remaining in the double-digit range for the installations segment.

Also, the consolidated EBITDA was 52% higher in Q4 2023 compared to Q4 2022, mainly due to the installations segment.

TeraPlast has a market capitalization of RON 1.29 billion (EUR 260 million), and the price of its shares rose by 2.4% y/y after the 4.4% d/d plunge on February 12.

(Photo source: Facebook/TeraPlast)