In 9M of 2020, sales decreased by 3%, EBITDA decreased by 18.8% and net profit decreased by 26.6%.

In 9M of 2020, Cinkarna Celje generated sales of EUR 130.4m, representing a decrease of 3% YoY. Such sales reached 75% of the company’s FY 2020 sales plan. The reason behind the drop lies in several factors. First, the spread of the COVID-19 pandemic triggered a process of accumulation of pigment inventories by customers at the end of Q1, which positively impacted the top line. Secondly, the absence of Chinese producers in the European market at the beginning of the year added to the rise in demand. However, in Q2 lower production and higher inventories led to a decrease in sales. Still, according to the Management’s estimates, Cinkarna Celje’s decline in sales was smaller than the overall decline in sales in the titanium dioxide market.

The total value of exports in 9M 2020 reached EUR 119.3m, which is flat YoY and represents 77% of the annual planned sales to foreign markets.

Meanwhile in Q3 solely, sales improved compared to the the previous quarter due to better epidemiological situation. The company notes that their focus remains still on pigment titanium dioxide and streamlining the portfolio of strategic business areas, focusing on core program and abandonment of unprofitable activities.

Operating expenses in the first 9 months reached EUR 114.2m, representing a slight increase of 1.3%. Such an increase mostly came on the back of higher material costs. As a result of all of the above mentioned, EBITDA amounted to EUR 25.3m, representing a decrease of 18.8%. Meanwhile, EBITDA margin stood at 19.4%, which is a decrease of 3.7 p.p. YoY.

Operating profit amounted to EUR 16.2m, representing a decrease of 26.4%. However, note that in 2020 Cinkarna Celje changed the method of valuing stocks of finished products compared to previous years. This change increased the operating result in 9M and will reduce the operating result in the last quarter, and on an annual basis it will be annulled. The positive impact of the change on net profit in the first nine months amounted to EUR 1.9m.

Lastly, in 9M of 2020, Cinkarna Celje recorded a net profit of EUR 13.77m, representing a decrease of 26.6%.

Turning our attention to CAPEX, it stood at EUR  8.8m, which represents 44.2% of the planned funds. The amount is lower than planned mainly due to the interruption of non-urgent investment and maintenance works during the pandemic due to COVID-19. The majority of the invested funds were intended for the production of titanium dioxide for improvement product quality, ensuring the reliability of individual devices or processes, improving safe and healthy working conditions and reducing environmental impacts.