Romanian industrial group and Bucharest Exchange blue chip TeraPlast (BVB: TRP), involved this year in an extensive expansion abroad, announced its revenues increased by 32% y/y, driven by more extensive operations out of the country, to RON 681 million (EUR 136 million) in January-September. 

Its profitability, however, deteriorated amid a "challenging environment": the bottom line moved from a RON 6.8 million net profit in the first nine months last year to a RON 7 million loss. Still, the company assures that it is "solidly positioned to approach this period with maturity and responsibility."

Despite the assurance, the company's shares dropped by 1.6% y/y after the financial release, resulting in a 4.6% y/y decline that put its market capitalization to RON 1.13 billion (EUR 226 million).

The company's EBITDA increased marginally to RON 45.2 million, with the EBITDA margin deteriorating to 6.6% from 8.7%. 

The segment of packaging (plastic, bioplastic) where the EBITDA margin is negative (-12.3% in January-September this year) marked the strongest expansion in terms of turnover (+163% y/y). The largest segment, that of installation products (plastic pipes), expanded by 25% y/y in terms of revenues but the EBITDA margin still deteriorated to 9.6% from 11.5%.

"We focused on diversifying external markets, including the acquisition of Optiplast [in Croatia], and on maintaining market share amidst fluctuations. Additionally, we are implementing operational efficiency measures across both the parent company and subsidiaries to enhance profitability," said Bogdan Crăciunaș, CFO of TeraPlast Group.

TeraPlast took over in January this year Palplast Moldova, which operates two production lines for high-density polyethene pipes for water and gas supply networks, following the fulfilment of all preceding conditions. Consequently, TeraPlast holds the majority stake in Palplast, respectively 51%, while the current shareholder, Fribourg Capital, retains 49%.

Later in February, the company announced the signing of the agreement for the acquisition of the Wolfgang Freiler Group, with modern production facilities in Hungary, from the Austrian family Uhl for a price of EUR 16.5 million.

In October, TeraPlast announced the signing of a purchase agreement to acquire 70% of the share capital of Optiplast, the third-largest flexible packaging manufacturer in Croatia. The shareholders are summoned on November 15 to endorse the deal.

iulian@romania-insider.com

(Photo source: Facebook/TeraPlast)