Portugal's leading cork manufacturer saw profits increase 6.8% to 19.9 million euros in the first quarter.
Corticeira Amorim’s, Portugal’s leading cork manufacturer, saw profits increase 6.8% to 19.9 million euros in the first quarter in year-on-year terms, with sales rising 0.7% to 203.7 million euros, still immune to the pandemic, the company announced on Thursday.
“Until the end of March there was no material impact [of the pandemic] on turnover and, although industrial activity is currently almost at full strength, we expect April, May and June will see a reduction,” said Corticeira Amorim in a statement sent to the Securities Market Commission (CMVM).
Acknowledging that “at this moment, the impact of the direct and indirect effects of Covid-19 is difficult to measure, as it is largely dependent on the extent of its dissemination and its effects on the global economy”, Corticeira Amorim said that “it will pay special attention to the issue of bill collections”, but it pointed out that, “in a universe of almost 30,000 customers around the globe, the risk is significantly spread”.
According to the company, the year-on-year comparison of turnover up to March is “conditioned” by the fact that the first quarter of 2019 was “the highest in terms of sales growth” (+9.2%) in the whole of last year.
In addition, it stated, the beginning of this year “was also affected by the signs of slowdown prior to Covid-19, resulting from the trade war between the US and China and by the application of 25% tariffs imposed by the US on imports of European wines with less than 14% alcohol”.
Until March, reported a 2.8% year-on-year increase in consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) to 35.8 million euros, with the EBITDA/sales ratio increasing from 17.2% to 17.6%.
According to Corticeira, this evolution reflects “the increases in sales prices and gains in operating efficiency in the various business units, which offset the negative effect of the increase in the consumption price of raw materials”.
In an analysis by Business Unit (BU), the sales growth of the Cork Stoppers BU – the moist important in Corticeira Amorim’s turnover – was 1.0%, to 144.8 million euros, with growth in the segments of still and sparkling wines, Neutrocork stoppers and in the US and Italian markets, while in France and Spain they retreated.