“Our net sales were €118 million in the second quarter with currencies impacting the sales positively by €8 million. Sales volumes decreased from the second quarter of 2021 which marked the last quarter of the COVID-19 boom while sales prices increased following the higher raw material prices. Our quarterly EBITDA declined to €1.9 million due to the lower sales volumes and lower margins as our raw material, energy and freight costs increased more than the sales prices. Fixed costs saving actions had a small positive impact on the result,” said Petri Helsky, president and CEO.
“We are continuing to identify and implement actions to improve our financial performance. As described in our previous interim report, we implemented an energy surcharge to all our products sold in Europe in mid-March which took effect in the second quarter. We have also progressed in our work on widening our product portfolio in the US at the production lines suffering from the inventory imbalance and we expect demand improvement for these lines in the second half of 2022 based on new contracted volumes. On the operations side we have launched a development program to further improve our raw material efficiency,” said Helsky.
In the first half of 2022, Suominen’s net sales were in line with the previous year and amounted to €228.3 million. Sales volumes decreased from 2021 while sales prices were higher. The impact of currencies on net sales was €12.6 million. The sales of the Americas business area were €126.0 million and of the Europe business area were €102.3 million.#
“The first half of 2022 was difficult for Suominen. In the second quarter we did not see an improvement in demand for the hard surface disinfectant products which have been suffering from the high inventory levels in the US supply chains. Overall our sales volumes improved slightly from the previous quarter but remained well below the corresponding period last year. What comes to raw materials, energy and transportation, there was another steep hike in these costs in the second quarter. Due to the lag in our sales pricing mechanisms our sales prices did not fully reflect the cost increases. Especially in Europe, the cost inflation was made worse by the war in Ukraine,” explained Helsky.
Suominen expects that its comparable EBITDA (earnings before interest, taxes, depreciation and amortisation) in 2022 will decrease clearly from 2021. The war in Ukraine has increased the already significant cost inflation in raw materials, energy, and transportation. Also, while there has been progress in the normalisation of the customer inventory levels in the US, it has been somewhat slower than expected. These factors will impact the full year result negatively even though the company expects that the demand for its products will improve in the second half of the year. In 2021, Suominen’s comparable EBITDA was €47 million.
“In June 2022 we agreed to extend our €100 million syndicated revolving credit facility agreement by one year. The maturity of the facility is now extended to July 2025. In the first half of the year our financial performance has clearly been weak. We are, however, seeing signs of improvement in both US product demand and the general raw material markets. These together with our improvement actions are expected to contribute positively to our financial results in the third quarter and especially in the fourth quarter,” concluded Helsky.
Fibre2Fashion News Desk (RR)