Frigoglass (Results Q3/9M 2014): By Manos Chatzidakis

Frigoglass (Results Q3/9M 2014): Frigoglass announced a weak set of Q3 results on shrinking business in cool operations (-14%) in Africa Middle East region and lower utilization rates. In specifics:

¡  Cool Operations’ sales declined by 4% year-on-year in the quarter, reflecting continued low cooler investments in an overall weak economic environment across key markets. In this unfavourable market environment, sales to Coca-Cola bottlers improved in the quarter, with sales increasing by 57%. This solid top-line performance was more than offset by lower investments from brewery customers, primarily due to the deteriorating beer market conditions in Russia and continuing macroeconomic challenges in South Africa.

¡  Third quarter EBITDA was negative at €1.6 million, marginally improving compared to last year’s negative EBITDA of €1.8 million. Nevertheless, low capacity utilization and the related cost underabsorption continued to adversely affect EBITDA in the quarter. The integration of Turkish manufacturing volume to Romania will drive better capacity utilization rates and significantly reduce overhead costs from 2015 onwards. Cool Operations reported an Operating Loss (EBIT) of €5.8 million, compared to a loss of €6.2 million in the prior year’s quarter. Cool Operations’ net losses reached €10.9 million in the quarter, compared to losses of €9.5 million the respective quarter last year

¡   Growth momentum in the Glass business continued in the third quarter of 2014, with sales increasing by a strong 32% year-on-year.  Glass Operations reported break-even net profits, compared to profits of €1.3 million in 3Q13This sustained high performance reflects increased demand in our prime Nigerian market for glass containers and the benefit of our complementary plastic crate offering. It also reflects strong growth in our Dubai-based glass operations from customers in the Middle East and the adjacent regions of East and Southern Africa

¡  The Jebel Ali business delivered sales growth of 41% in the quarter. Increased demand for light-weight bottles in the Middle East and the enhancement of our customer base in East and Southern Africa, drove this year-on-year growth. EBITDA increased by 7% year-on-year in the quarter to €7.5 million, with respective margin declining to 20.2%. The margin decline mainly reflects last year’s one-off gain of €0.6 million from the disposal of a fixed asset in Jebel Ali as well as reduced export related grants in Nigeria.

Frigoglass will host an analysts and investors conference call to discuss its third quarter results today at 4:00 pm, Athens Time (2:00 pm London time and 9:00 am New York time). CC details:

¡  Greece +30 210 969 6444

¡  UK (also other international callers) +44 203 139 4830

¡  US +1 718 873 9077

Frigoglass	Results 9M 2014
In thous. euro	2013	2014	Δ
Sales	395,671	359,530	-9.1%
Q3	82,674	89,367	8.1%
EBITDA	52,819	42,471	-19.6%
(% Sales)	13.35%	11.81%	-154 bps
Q3	5,201	5,903	13.5%
(% Sales)	6.29%	6.61%	+31 bps
Net Income	1,651	-50,289	-3146.0%
(% Sales)	0.42%	-13.99%	-1,440 bps
Q3	-8,220	-10,849	-32.0%
(% Sales)	-9.94%	-12.14%	-220 bps