Reno de Medici swings to net profit of €0.4M for first nine months compared to net loss of €7M in year-ago period; net revenue up 1.5% year-over-year, to €353.9M, with orders in Europe for white-lined chipboard up 2.7% from a year ago

MILAN , October 31, 2013 (press release) – MAIN CONSOLIDATED RESULTS OF THE FIRST NINE MONTHS OF 2013 (VS. FIRST NINE MONTHS OF 2012):

  • NET REVENUES: €353.9 MILLION (COMPARED TO €348.8 MILLION AS AT SEPTEMBER 30, 2012) 
  • GROSS OPERATING PROFIT (EBITDA): €24.8 MILLION (COMPARED TO €19.5 MILLION AS AT SEPTEMBER 30, 2012) 
  • OPERATING PROFIT (EBIT): PROFIT OF €6.4 MILLION (COMPARED TO A LOSS OF €0.3 MILLION AS AT SEPTEMBER 30, 2012) 
  • NET PROFIT FOR THE PERIOD: PROFIT OF €0.4 MILLION (COMPARED TO A LOSS OF €7.0 MILLION AS AT SEPTEMBER 30, 2012) 
  • NET FINANCIAL DEBT: €85.1 MILLION (COMPARED TO €86.3 MILLION AS AT DECEMBER 31, 2012) 

The Board of Directors of Reno De Medici S.p.A. (“RDM” or the “Company”), parent company of one of the world’s largest producers of recycled cartonboard, met today under the chairmanship of Mr. Robert Hall, examined and approved the Interim Management Report as at September 30, 2013 of the Reno De Medici Group (“RDM Group” or the “Group”).

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The general economic scenario as at September 30, 2013, according to the forecasts of the main economic research centers, saw the consolidation of signs of recovery, which remains slow, however, and different in the various macro areas throughout the world, and in Europe it is different in individual countries. As far as Italy is concerned, the recovery is currently especially visible in terms of the best expectations, although some signs can already be seen in the recovery for orders, particularly foreign orders.

The general outlook is positive, like that of the sector, appears to be improving slowly.

Overall performance is also demonstrated in the development of European demand for white lined chipboard packaging produced from recycled fibers, which in the first nine months of 2013 returned to the levels of 2011, with an increase of 2.65% compared with the same period in 2012; growth in the third quarter was up by more than 4% over the same period of the previous year.
 
As far as RDM Group is concerned, the third quarter has benefited fully from the increase in sales prices implemented by the Company at the end of the previous quarter, restoring margins which had gradually been eroded since the second half of 2012 as a result of the gradual fall in actual prices.

Prices of raw materials remained essentially stable at the levels seen in June, even in relation to the slow-down in exports of fibrous products to China.

As far as the development of energy costs is concerned, after the peak recorded in the first quarter, the price of natural gas remained essentially stable, although still somewhat high. The development of the price of natural gas in 2013 was positive, including in Italy, although the gap between prices applied in Italy and the European average remained high. However, as far as Reno De Medici is concerned, the new natural gas supply agreements signed for 2013 allow for significant savings over the previous year.

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As of September 30, 2013, Net Revenues of the RDM Group totalled €354 million, up from €349 million generated as at September 30, 2012, due largely to higher sale volumes, with 653,000 tons sold, compared to 620,000 tons in the first nine months of 2012. In detail, the quarter saw an improvement in the geographic mix, with an increase in the tons sold in European markets and a fall in sales in overseas markets, with greater margins.

Labor costs as at September 30, 2013 remain essentially in line with the first nine months of 2012, moving from €53.9 million as at September 30, 2012 to €53.4 million for the first nine months of 2013.

As at September 30, 2013 total actual EBITDA was €24.8 million, an appreciable improvement over the €19.5 million for the same period in the previous year. EBITDA is still impacted by €0.9 million in costs generated by establishments whose paper production activities have ceased.

As of September 30, 2013, the Consolidated Operating Profit (EBIT) of the RDM Group was positive at €6.4 million, which is also an improvement compared to the loss of €0.3 million reported as at September 30, 2012.

At September 30, 2013 the RDM Group’s capital expenditure totaled €10.9 million (€13.7 million as at 30 September 2012).

Confirming the positive trend of the previous quarters, Reno De Medici Group closed the first nine months of 2013 with a Net Profit for the period of €425,000 compared to a reported loss of €6,963,000 in the same period of the previous year. The net result for the quarter was also positive, with a profit of €181,000, in spite of suffering from the usual slow down of activities in Italy, which are a feature of the month of August.

Consolidated net financial debt at September 30, 2013 amounted to €85.1 million after capital expenditure, a slight improvement compared to the €86.3 million at December 31, 2012.

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This document is an English translation from Italian. The Italian original shall prevail in case of difference in interpretation and/or factual errors.

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The Interim Management Report for the period ended September 30, 2013 will be available to the public at the Company’s registered office at Via Durini n. 16/18, Milan, Italy and at Borsa Italiana, from November 1st, 2013. Copies can be obtained. Such documents are also consultable on the website: www.Renodemedici.it.

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