Preliminary forecast of results for the third quarter of 2018

The Management Board of Grupa Kęty S.A., according to the announced calendar of corporate events, hereby publishes preliminary forecasts of results for the third quarter of 2018

The demand on the market continues to be high. In the Extruded Products Segment, the average waiting time for order completion on the European market is 4-6 weeks, for some products even 4-6 months. The so-called ‘standard profiles’, for which waiting time does not exceed 2-3 weeks, are an exception.  Also in the Aluminium Systems Segment, the demand remains at a high level. One can assume that the volume of orders could be even higher if it were not for continuous liquidity problems in the construction industry. Customers indicate that it is currently one of the main factors, apart from the lack of employees, limiting the growth of the market. The flexible packaging market has been developing steadily, systematically aiming at minimising the use of laminates composed of many different components which are difficult to recycle.

Packaging based on biodegradable or easily recyclable intermediates is a preferred solution. Thanks to the diversified product range, the Segment is responding to these trends, owing to which sales value is systematically growing. In particular Group Segments estimated sales growth will be as follows:

• Extruded Products Segment – an increase by 15%
• Aluminium Systems Segment – an increase by 14%
• Flexible Packaging Segment – an increase by 10%

As estimated by the Management Board, consolidated sales revenue will amount to 815 million PLN (14%) and consolidated operating profit for the quarter will increase from 99 million PLN recorded in the previous year to ca. 109 million PLN (+10%) in the present year. Consolidated EBITDA (earnings before interest, taxes, depreciation and amortisation) will increase from 129 million PLN recorded in the previous year to ca. 140 million PLN (+9%). The balance of financing activities in the quarter (costs of interest, exchange rate differences on balance sheet items valuation, including foreign currency loans) will be negative and amount to ca. 6 million PLN (in the third quarter of 2017, the balance amounted to -3.7 million PLN). Estimated consolidated net profit for the quarter will amount to ca. 83 million PLN, i.e. it will be higher by 7% than the profit generated in the corresponding quarter of the previous year. According to estimates, at the end of the quarter, the Group’s net debt will amount to ca. 770 million PLN, thus it will be higher by ca. 190 million PLN than the figure recorded at the end of the second quarter of 2018. The increase in the Group’s debt results from the implemented investment programme and the payment in the third quarter of the dividend of 23.94 PLN per share.

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