On canvas: new production line; Predicts income of 140 m – capital market

Continues to grow following the corona:

On canvas
+ 1.36%

Base:8,808

opening:8,808

High:9,090

low:8,800

change:523,619

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Establish a new line for the production of non-woven fabrics at an estimated cost of NIS 190 million, the company reports. The company expects revenues of approximately NIS 140 million after the completion of its construction, which is expected to be completed by the company in early 2024.

The company is expected to establish the new line at the plant near Dimona and for its operation the company will need about 30 employees, with the company intending that the fabrics produced in the new line will be able to meet stringent environmental regulation requirements, including non-use of plastic materials. The company explains that the establishment of the new line is required for the purpose of upgrading the existing product basket, developing new growth engines with higher profitability and maintaining the company’s market share in the field of wet wipes.

Last month, it announced a fabric that manufactures and markets damp cloths, and non-woven fabrics, that it has decided to change the organizational structure and move to activity through five divisions. This is because following the Corona crisis, the company has created high demand in Europe and the US for wipes in general and disinfectant wipes in particular.

The company’s CEO Dan concludes: “The decision to establish a new production line in Dimona is a significant event for Elbad, and it is a continuation of the trend of producing green products and strengthening the field, especially in Europe.”

Improvement in indices following the corona
Following the corona, the company reported in its third quarter reports an improvement in all operating indices. The company made a profit of NIS 41.3 million (profit at an annual rate of NIS 117.6 million). Since we estimated on the BizPortal website at the end of March that the company is expected to return to the highway, the stock has soared by about 300%.

Revenues in the third quarter increased by 19% and amounted to NIS 404.7 million, compared with revenues of NIS 340.3 million in the third quarter of 2019. Most of the increase in revenue is attributed to an increase of NIS 65 million in sales in the wipes sector. On the other hand, the company notes that in the third quarter of the year, the average exchange rate of the dollar against the shekel fell by 2.4% and of the euro against the shekel by 4.3%, respectively, compared with the corresponding quarter last year. The effect of the changes in exchange rates is a decrease of about NIS 13 million in revenues.

Revenues from the wipes segment increased to NIS 365.1 million, compared to NIS 300.3 million in the corresponding quarter last year, while female hygiene revenues decreased slightly to NIS 39.5 million, compared to NIS 40 million in the third quarter of 2019, in line with the general market trend. Global hygiene, which recorded a decline in the consumption of hygiene products, among other things due to closures that were forced as a result of the spread of the corona virus.

In the bottom line, Cloth reports a net profit of NIS 42.7 million, compared with a loss of NIS 24.3 million in the third quarter of 2019 and a profit of NIS 25 million in the previous quarter.