Sniezka did not feel the negative effects of the pandemic in Q1
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The COVID-19 pandemic had no negative impact on Sniezka’s results achieved in Q1 2020 – on all key markets sales were higher than a year before. However, a number of measures were taken in the companies from the capital group to secure their operating activities and financial liquidity. As every year, Sniezka also plans to pay out a dividend.
During the first three months of 2020, the Sniezka Capital Group achieved consolidated sales revenues of PLN 167.8 million, i.e. 30.5% higher than the year before. This was influenced by higher sales in all four key markets and the consolidation of results of the Hungarian company Poli-Farbe Vegyipari Kft. and its subsidiaries, which joined the Group from the second half of May 2019.
Traditionally, the Group achieved the highest revenues in Poland. Sales on the Polish market increased by 1.6% y/y to PLN 106.0 million. At the same time, Poland’s share in the sales structure decreased to 63.2% to Hungary, which, with a share of 19.7%, was the Group’s second largest market. On the Hungarian market, sales revenues generated by the Group amounted to PLN 33.0 million.
Compared to the previous year, the Group also achieved significantly better sales results on its markets number three and four. In Ukraine revenues increased by 17.7% to PLN 16.1 million and in Belarus by 15.6% to PLN 6.8 million.
In Q1 2020, the Group also recorded higher profits: operating profit (EBIT) of PLN 20.1 million (+16.2% y/y), EBITDA of PLN 28.1 million (+24.3% y/y) and consolidated net profit of PLN 15.3 million (+8.7% y/y). Profit attributable to shareholders of the parent company amounted to PLN 14.2 million (+1.3% y/y).
– The restrictions related to the spread of coronavirus introduced in March did not affect our first quarter results. What is more, for some time now, more traffic has been seen in construction stores, which also translates into the sale of paints and varnishes. We think that this is a result of temporary restrictions on movement, but also of remote working. More time spent at home or in the garden caused many Poles to decide to renovate, paint or renew their fences or garden furniture – comments Piotr Mikrut, President of the Board of FFiL Sniezka SA.
Despite restrictions and difficulties related to the pandemic, Sniezka continues the largest investment cycle in its history started in 2018. In the first three months of the year, it spent 41.3 million PLN for this purpose, i.e. 284.0% more than in the same period last year. The largest part of it were expenses related to the construction of a warehouse hall of the new Logistics Centre in Zawada and the modernization of production lines in the Podkarpackie plants in Lubzin (department of coloured paints) and Pustków (department of white paints). Moreover, during this period, the main implementations under the Change IT digital transformation project carried out at FFiL Sniezka SA were completed.
Impact of the COVID-19 pandemic on the Group
The situation related to the COVID-19 pandemic caused that at the beginning of March this year Sniezka took many measures to protect employees and co-workers, among others: she applied additional precautions in production plants and warehouses, installed professional equipment for automatic body temperature measurement, introduced remote work for office workers, provided protective measures, and initiated educational activities on responsible behaviour minimizing the risk of infections.
From an operational perspective, only the temporary reduction of production at the Ukrainian plant from 24 March to 11 May 2020, implemented following the introduction of trade restrictions in this country, was significant. At present, production in that plant runs smoothly – similarly as in other plants of the Group.
The Management Board of Sniezka closely monitors the situation related to the COVID-19 pandemic and takes steps to maintain an optimal, safe level of liquidity of the Group. For this purpose, among others, FFiL Sniezka S.A. has signed a factoring agreement, which will enable faster receipt of receivables from contractors, and has secured the possibility of obtaining additional financing for current operating needs, e.g. purchase of raw materials and materials for production.
The financial situation of Sniezka is good. Therefore – after analysing the liquidity situation, investment plans, as well as the possible impact of the COVID-19 pandemic on the future condition of the company – in mid-May this year, the Management Board of FFiL Sniezka SA recommended the payment of dividend from the net profit achieved in 2019 at the same level as last year. The proposal assumes the amount of PLN 32.8 million, i.e. PLN 2.6 per share, to be allocated to the dividend. The decision on the dividend will be made by shareholders at the company’s general meeting of shareholders, which was convened for 16 June.