Teraplast (TRP) Q3 2024 earnings summary

Executive summary

• Turnover rose 32% year-over-year to RON 681.2 million for the first nine months of 2024, driven by volume growth, M&A activity, and exports rising to 25% of sales.

• Volumes sold increased 49% year-over-year, with significant contributions from installations and recycled PVC.

• EBITDA remained stable at RON 45.2 million, but margin declined to 6.6% due to pricing pressures and higher costs.

• Net result turned negative at -RON 6.9 million, impacted by higher financing costs, depreciation, and non-recurring expansion expenses.

• Group structure expanded with Palplast and Freiler Group consolidated; SPA signed for Optiplast acquisition, pending approval.

Significant events and developments

• SPA signed for 70% of Optiplast at an EBITDA multiple of 6.5; estimated price around EUR 9.5 million, pending approval.

• Capital increase completed, raising EUR 20 million for acquisitions and working capital.

• RON 79 million paid for Freiler Group acquisition; RON 45 million CapEx spent, mainly on stretch film factory and production upgrades.

• RON 16.9 million in subsidies collected for stretch film factory, with more expected.

• TeraVerde Carbon initiative launched for reforestation projects in Romania.

Financial highlights

• Gross margin at 35%, down 1pp year-over-year; operating costs increased 35% due to consolidation and higher salaries.

• Net working capital rose to RON 253.2 million, reflecting acquisitions.

• Cash and equivalents at September 30, 2024, stood at RON 19.7 million.

• Net debt/EBITDA improved to 4.3x from 4.6x at year-end 2023.

• Q3 2024 turnover up 29% year-over-year to RON 253.1 million; Q3 EBITDA down 16% to RON 18.3 million.