Romania's TeraPlast Group H1 net profit down 43% y/y

“The net profit experienced a contraction, reaching 16.4 million lei ($3.4 million/3.3 million euro), from 28.7 million lei in the same period of last year, on a strong base effect and as a result of the commissioning of new investments, which are still in the ramp up phase,” the company said in a press release.

The turnover in the first half of 2022 increased by 37%, to 373.6 million lei.

EBITDA stood at 35.7 million lei, down by 16% compared to the same period of last year.

Export sales reached 63.8 million lei, a 79% increase compared to the first half of 2021.

“Overall, TeraPlast Group's results were weighed down by a below-expected evolution of the construction sector in Romania. The sector grew overall by just 1.3% between January and May 2022 compared to the first 5 months of 2021, but the engineering works segment (where public investment in infrastructure is found) saw a contraction of more than 10% over the same period,” the company said.

The sector faced long delays, both in launching new tenders and in indexing old contracts to the new costs. Blockages appeared, and activity on the construction sites stagnated, TeraPlast added.

The group expects an increase of 15% in turnover, 12% in EBITDA compared to 2021 and maintaining a double-digit Group EBITDA margin of 11.8% for 2022. The main sources of growth remain its units installations and recycling, and a positive effect is expected from a potential revitalization of infrastructure works in the second part of the third quarter.

The net profit will be similar to last year, when the group recorded a net profit from the operational activity of 42.3 million lei.

TeraPlast SA's shares traded 2.24% lower at 0.6550 lei intraday on Tuesday on the Bucharest Stock Exchange.

(1 euro=4.932 lei)