For the FY 2019, the company expects a 3% YoY increase in sales, a decrease in EBITDA of 27.6% and a decrease in net profit of 37.9%.
Cinkarna Celje published a document on the Ljubljana Stock Exchange announcing their FY 2019 target and 2020 plan.
2019 Target
For the FY 2019, Cinkarna Celje expects to record a 3% increase in sales, amounting to EUR 168.8m. The mentioned increase is expected to come from sales on the foreign market, which is expected to increase by 5% YoY, amounting to EUR 19.06m. Meanwhile, the sales on domestic market, which make up for roughly 11% of the sales, are expected to record a decrease in sales of 12%.
Change in the value of inventories of products and work in progress is expected to decrease by EUR 9.4m, amounting to EUR 2.37m.
Operating expenses are expected to observe an increase of 6.8%, amounting to EUR 155.7m. Such an increase could mostly be attributed to higher material costs of EUR 9m.
As a result of the above-mentioned, EBITDA is expected to decrease by 26.7% YoY, amounting to EUR 35.75m. Meanwhile, operating profit is expected to record a decrease fo 36.9%, amounting to EUR 22.96m.
In the FY 2019, net profit is expected to amount to EUR 18.98m, which would represent a decrease of 37.9% YoY.
Outlook for 2020
In 2020, Cinkarna Celje expects to reach EUR 174.2m in sales revenue, which the company deems achievable. Such a result represents an increase of 3% compared to the 2019 target. Sales in foreign markets is expected to reach EUR 155.7m in 2020, which is a 4% increase.
Change in the value of inventories of products and work in progress is expected to further decrease by EUR 7.3m, amounting to EUR -4.9m.
Compared to the 2019 target, in 2020, operating expenses are expected to observe a slight decrease of 0.5%, which would mostly come on the back of lower labor costs by EUR 2.4m.
As a result, EBITDA is expected to amount to EUR 29.52m, which would represent a decrease of 17%. Meanwhile, operating profit is expected to further decrease by 24%, amounting to EUR 17.4m.
The projected net profit for 2020 amounts to EUR 14.1m, which would note a decrease of 26%. The company states that such a poor performance throughout the P&L is a direct consequence of the decline sales prices of titanium dioxide pigment.
Turning our attention to CAPEX, the investments in 2020 will be made primarily in the context of enabling sales growth, sourcing new and maximizing the availability of existing titanium production facilities of dioxide. It is mainly a continuation of the planned investments for 2019.
