Sabaf: results for 2013 and fourth-quarter

Sabaf’s revenues for 2013 were €131 million, broadly unchanged versus the figure of €130.7 million for 2012 (+0.2%). However, thanks to considerable productivity gains over the year, the Group registered a significant improvement in profitability: EBITDA was €24.6 million (with an 18.8% margin in sales, up 12.6%), EBIT totalled €11.1 million (8.5% of sales, up 40.6%), and net profit came in at €8.1 million (+93.1% versus 2012).
In 4Q 2013, the Sabaf Group booked sales revenue of €29.5 million, a fall of 4.3% compared with the figure of €30.8 million registered in 4Q 2012. In the last quarter of 2013, demand on some of the main markets on which the Group operates again slowed, after generally showing signs of stabilising in the first part of the year. The South American market was an exception, and confirmed solid growth, with sales at €6 million, up 25.3% versus 4Q 2012. The Group’s profitability in the fourth quarter was affected by low levels of production and sales, and despite confirmation of an improvement versus the corresponding period of 2012, it came in lower than in the first nine months of 2013. Specifically, EBITDA for 4Q 2013 was €4.8 million, with a 16.3% margin on sales, down by 1.7% compared with the €4.9 million (15.8% of sales) registered in 4Q 2012. EBIT was €1.6 million, equal to 5.3% of sales, versus €0.6 million in the same period of 2012, when the Group recorded a goodwill impairment of €1 million. Pre-tax profit was €1.3 million, versus €0.2 million in 4Q 2012. Net profit for the period was €2.1 million (€0.6 million in 4Q 2012), and was boosted by deferred tax assets of €1.1 million, as a result of tax breaks relating to investments made in Turkey.
The slowdown in demand seen at the end of 2013 continued into January 2014, when the Sabaf Group recorded revenues in line with those of January 2013. Since the beginning of February, however, there have been signs of a recovery in volumes from numerous customers.
The management is monitoring macroeconomic developments in the important markets of Brazil and Turkey, where the Sabaf Group has production sites of increasing significance. Competitiveness is expected to increase following the devaluation of the Brazilian real and the Turkish lira: more than half the products made in Brazil and Turkey are destined for export to other final markets (in South America and Europe respectively). Conversely, the restrictive monetary policies put in place could lead to a drop in domestic consumption.
Based on negotiations concluded with its main customers, the Group believes that it will be able to register improved sales and profitability compared with 2013. These targets assume a macroeconomic scenario not affected by unpredictable events.

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