Boryszew S A : Group delivers strong performance in H1 2021

Boryszew Group, one of the largest private industrial groups in Poland, has published its consolidated financial results for the first half of 2021. In the reported period, the Group generated the sales revenue of PLN 3.1bn, up by 33% on H1 2020 (on a like-for-like basis, i.e. excluding Impexmetal S.A. Aluminium Konin). The EBITDA nearly doubled year-to-year to reach PLN 189m.

In the first half of 2021, Boryszew Group recorded across-the-board growth in key financial results year-on-year, despite the sale of Impexmetal S.A. Aluminium Konin in November 2020.

"We closed the first half of this year with very strong results. High EBITDA and a satisfying net profit allow us to feel optimistic about the future of our business. The net result would have been even higher if it had not been for the reserve established due to the closure of our plant in Wroclaw, Hutmen. The total amount of this provision is PLN 19 million, the vast majority of which is of a non-cash nature," said Wojciech Kowalczyk, CEO of Boryszew S.A.

Boryszew Group operates through three business segments. The Metals Segment accounted for 64% of consolidated revenues in the reported period, the Automotive Segment - for 29%, whereas 7% of revenues were generated by the Chemicals and Others Segments.

Metals Segment

The first two quarters of 2021 were the first full periods without Impexmetal S.A. Aluminium Konin being consolidated in the results of the Metals Segment. Excluding the results of the Konin plant, in H1 2021 the Segment's revenues were up by nearly 35% (vs. H1 2020) to reach PLN 2 billion. The Segment generated an EBITDA of PLN 127 million, up by 64% year-on-year.

Automotive Segment

In the first half of 2021, the revenues of the Automotive Segment grew by more than 25% (vs. the first half of 2020) to PLN 895 million, largely on the back of the economic recovery driven by the end of lockdowns. The Segment's EBITDA soared nearly 7-fold year-on-year to reach PLN 51 million.

"The global semiconductor supply shortage, a spike in the costs of components and variations in orders placed by clients do not impact well on the Segment's financial results. The Management Board of Boryszew Group is closely monitoring the highly volatile market developments in the automotive sector, which tend to change in very short, week-to-week cycles. We will be therefore making decisions on the Segment's operations on an ongoing basis, also taking into account our relations with key clients and their willingness to mitigate any possible adverse impacts," Boryszew CEOWojciech Kowalczyk commented.

Chemicals Segment

The first half of this year brought lower sales volumes and profit margins for virucidal products in the Chemicals Segment as compared to the same period a year before. At the same, however, it saw significant growth in the sales of plasticizers. In the analysed period, Boryszew Group's Chemicals Segment generated revenues of PLN 136 million, while the Segment's EBITDA reached PLN 11.6 million.

Product portfolio development

In the Chemicals Segment, mainly in Boryszew ERG, in the first half of 2021 preparations were underway to launch several new products on the market, including a new range of car cosmetics under Boryszew's iconic brand Borygo, the innovative aluminium cleaning fluid AluClean ERG and multi-season, low freezing point liquids protecting the G12++ and G13 cooling systems (for hybrid vehicles) against freezing and overheating.

Furthermore, Boryszew Group' continues to work on developing its product offer in the Metals and Automotive Segments as well. In NPA Skawina, highly advanced works on the production of aluminium conduits for electric vehicles and aluminium wire rod alloys for specialized marine cables are conducted, while WM "Dziedzice" executes the R&D project on high-precision cold drawn products from two-phase brasses. In the Automotive Segment, the Maflow Group works on developing hoses for air-conditioning systems using R744 (CO₂) as refrigerant that find application in electric vehicles (EV).

Boryszew Group plans for next quarters

The COVID-19 pandemic has highlighted the importance of supply chain security, the ability to swiftly adapt costs to the changing environment, and liquidity management for conducting business operations. As a result, European clients have started to value reliable and safe deliveries even at the expense of high prices. In the nearest future, Boryszew Group will continue to benefit from this new trend to shorten supply chains in the Metals Segment.

"In the upcoming periods, the global industry will continue to face the challenge of a shortage of components manufactured mainly in China. An additional risk factor is the unstable situation of major players on the Asian market. For this reason, we have decided to postpone the release of Boryszew Group's new business strategy until the second quarter of 2022. In view of the prolonged uncertainty related to the pandemic and its impact on the global economy, this autumn seems not to be the right time for making such important declarations,"CEO Wojciech Kowalczyk concluded.

At present, Boryszew Group is in the process of analysing strategic options, in the course of which some asset-related decisions have been made, including the closure of Hutmen, the conclusion of a letter of intent on the sale of FŁT Group (conducting commercial operations only), and the sale of Elana PET in Toruń, which are all non-strategic assets.