Profits leap for Pegas

PegasSpunmelt major Pegas recorded a net profit of €20.8 million in 2009 –almost 40% higher than in 2008, primarily as a result of stable operating profitability, FX gains and substantially lower interest costs due to a lower level of indebtedness and lower interest rates.
Sales achieved by the Czech Republic-based company were €123.4 million, down by 13.5% compared with 2008.
Revenues were primarily influenced by the rapid drop in polyethylene and polypropylene raw materials, which subsequently led to lower sales prices for final products.
“In 2009 Pegas achieved a very good operating result in terms of EBITDA, which reached a similar level as 2008,” said said František Řezáč, the company’s CEO. “In the first half of last year, we benefited from the positive effect of the price pass-through mechanism, while from the middle of the year onwards it was necessary to absorb the negative impact of increases in input material prices which continue to prevail.
“In an effort to eliminate this negative impact, we relied on the traditionally outstanding production efficiency of our modern machinery, on a higher than expected demand for our products and last but not least, on a relatively stable exchange rate with the Euro compared with 2008.
“We are also pleased that bank debt was reduced by one fifth to €96 million whilst making a dividend payment of €8.3 million. The continuing ability of our business to generate cash gives us the confidence of continued financial stability and the potential for further growth.
“This year  has started satisfactorily and while we do not believe that the circumstances will be as positive as in 2009, we continue to believe that solid returns will be produced for shareholders.”

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