Disclosure of estimated financial results of Grupa Kęty S.A. Capital Group for Q1, 2019

In accordance with the announced calendar of corporate events, the Management Board of Grupa Kęty S.A. hereby discloses in public the preliminary forecast of its results for the first quarter of 2019.

The first quarter has not significantly affected the good market standing reported in the second part of 2018. In the Extruded Products Segment the European market growth rate is estimated to be nearly 2% in the first quarter of the year, whereas the manufacturers assume a stable level of orders in the coming periods. The situation is similar in the Aluminium Systems Segment. The demand is high, which translates into the growth rate watched by the Segment. Also the Flexible Packaging Segment records very good sales. Despite very high production capacity utilisation, over 10% growth in sales was achieved, which is a result exceeding the projections for the current year. In the first quarter, the estimated sales increase in the particular Segments will be as follows:

  • Extruded Products Segment – an increase by 7%;
  • Aluminium Systems Segment – an increase by 20%;
  • Flexible Packaging Segment – an increase by 11%.

As estimated by the Management Board, consolidated sales will amount to PLN 770 million (14% growth) and consolidated operating profit will reach PLN 73 million, and the figures are close to those for the previous year. The drop in margin on operating activities results mainly from a delay in adjusting prices to the higher cost base in the Extruded Products Segment. Consolidated EBITDA (earnings before interest, taxes, depreciation and amortisation) will increase from PLN 105 million recorded in the previous year to PLN 107 million in the current year (+2%). The balance of financing activities in the quarter (costs of interest, foreign exchange gains/losses with regard to balance sheet items valuation, including foreign currency loans) will be negative and will amount to approximately PLN 6 million (in Q.1, 2017 the balance equalled PLN -5.2 million). Estimated consolidated net profit for the quarter will amount to roughly PLN 53 million, which means it will be identical as the figure in the previous year. Based on the estimates, at the end of the quarter the Capital Group’s net debt will amount to approximately PLN 750 million, and will be higher by about PLN 25 million than the debt recorded at the end of 2018. The higher indebtedness of the Capital Group results from the capital expenditure program under way.

The above forecast was prepared on the basis of the following assumptions:

Q.3,2018 Q.3, 2019 (forecast) Change
average EUR/PLN rate in Q.3 4.18 4.30 +3%
average USD/PLN rate in Q.3 3.40 3.79 +11%
average 3M aluminium price in Q.3 2,164 USD/t 1,880 USD/t -13%