October 30 (SeeNews) - Romanian plastic products manufacturer Teraplast Group [BSE:TRP] said on Monday its net profit more than halved to 15.9 million lei ($4 million/3.5 million euro) in the first nine months of 2017, compared to 30.3 million lei in the year-ago period.
The consolidated operating result for the first three quarters of 2017 was 19 million lei, down from 36.3 million lei in the like period of 2016, the company said in its third quarter financial statement.
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The bulk of the negative financial result is a consequence of rising interest expenses, taking into account credits allocated to investments, whose results are not yet visible, the company added.
Teraplast Group's turnover was 295 million lei in the first three quarters of 2017, 5% lower than in the prior-year period of 2016. This was due to the fact that the company had to give up some clients which were having financial difficulties and due to lack of state investment.
Also, the company's results were negatively influenced by lower sales volumes, higher prices of raw materials, increased depreciation due to the investments made, higher salary costs due to new hiring for the recycling department, salary adjustments for alignment with the local labour market requirements and due to the storage group policy of keeping employees in production despite falling orders.
"The first nine months of this year came with new challenges and opportunities for Teraplast which continued its development strategy supported by a series of very important acquisitions," CEO Mirela Pop said.
Teraplast opened its TeraSteel sandwich panels factory in Serbia earlier this month. Teraplast bought the factory, formerly known as Interlemind, for 4.3 million euro ($5.07 million) in June. The production facility, located in the southern Serbian city of Leskovac, has a production capacity of 2.2 million sq m of sandwich panels per year. The group plans to invest 2.7 million euro in the factory's development and to provide 4 million euro of working capital by the end of the year.
Earlier in October, Romania's anti-trust regulator approved the takeover of plastic products manufacturer Politub by Teraplast. The agreement for the takeover was signed for an undisclosed sum in August.
In September, the group increased its planned 2017 investment by 14% to 96 million lei. Teraplast sought the hike due to the multiple acquisitions made by the company in the first half of the year.
In June, Teraplast acquired a further 10% of Romanian roof tiles maker Depaco, boosting its stake in the company to 60%.
Teraplast is Romania’s leading PVC manufacturer and one of the main materials manufacturers for the construction and installation market. The company was founded in 1896 in Bistrita, in northern Romania, as a ceramic tiles manufacturing unit.
Teraplast shares traded 2.83% lower at 0.4120 lei on the Bucharest Stock Exchange as of 1231 CET on Monday.
(1 euro=4.5980 lei)