Corticeira Amorim closed the first quarter of the year with a profit of 16.1 million euros, which represents a drop of 32.4% year-on-year, the group reported this Thursday, when presenting the results to the CMVM – Commission of the Securities Market.
In the same period, consolidated sales fell by 9.7%, to 234.7 million euros.
“The first three months of the year were affected by unfavorable market conditions”, comments the company’s president, António Rios de Amorim, in the results presentation statement.
The manager refers to a context marked by “negative effects of operational deleveraging”, “volume contraction” in the sectors where it operates and “increased cork consumer prices”. On the company’s side, he says, efforts “were focused on increasing industrial efficiency, improving the ‘mix’ and gaining market share”.
Pressure on sales in all units
“In the flooring segment, given the lack of encouraging signs from the European market, it became inevitable to implement, in the short term, an industrial optimization plan that aims to reduce operational losses and increase the efficiency of Amorim Cork Flooring”, he says. the company.
According to information from the cork company, all business units (BU) registered pressure on sales, except Amorim Cork Composites, with growth to 27.5 million euros (+0.6% compared to the same period last year) . “Amorim Cork’s sales (-10.4% compared to the same period last year), which represented 77% of consolidated sales, were penalized by the reduction in volumes, across all segments, even though they benefited from improvements in the mix of product and the implementation of price increases”, states the company.
In the numbers that reflect the company’s performance, the statement also mentions a consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) of 43.7 million euros, below the 47.9 million recorded a year earlier, due to the consumption of raw materials purchased at higher prices and the negative effects of operational deleveraging.
Marking the results, the group also highlights the inclusion of non-recurring costs from the short-term implementation of the industrial optimization plan at Amorim Cork Flooring (4 million euros), “as well as the increase in financial charges as a result of the increase in rates interest rate and higher level of debt”.
Net interest-bearing debt fell, at the end of March, to 236.7 million euros (240.8 million in last December), despite the increase in working capital needs (25.7 million euros) and the increase in investment in fixed assets (12.4 million).
Optimization plan
Regarding Amorim Cork Flooring’s industrial optimization plan, the group states that under the influence of the “economic context that affects the construction sector and intensified competition from Asian producers, the flooring market in Europe faced sales reductions of 14% in 2022 and around 20% in 2023, recording significant losses that have led large players sector to implement measures to reduce costs”. “This unfavorable context also penalized the activity and results of Amorim Cork Flooring, which, in recent years, has presented losses, which worsened in the first months of 2024”, he adds.
“Considering the demanding macroeconomic context, the lack of signs of recovery in the flooring industry and the current competitive weaknesses of Amorim Cork Flooring, it was decided to initiate a process of restructuring this business unit which involves, in a first phase, the adjustment of its structure productive and supporting the current size of sales, in order to reduce operational losses and increase efficiency through industrial optimization”, the company also states.
As for the future, the note is confident that “the investments made in recent years will allow us to continue to provide innovative products and solutions, conquer new markets and customers, protecting profitability levels and reinforcing financial solidity”.
