According to FUNDER website data,
100 mutual funds hold Avgol shares worth NIS 27.01 million
Funds that hold significant holdings in the stock – for the full list of holdings
Below is a change in the holdings of the mutual funds in the Avgol share according to FUNDER-MVF data.
Abgul
Happy to report strong results in the fourth quarter of 2020 and throughout the year. During the quarter, the demand for hygiene and medical products continued to be significant worldwide, supporting high sales and manufacturing volumes in a better product mix. All of the company’s factories around the world operated at very high efficiency.
Abgul Is a world leader in the development, production and marketing of nonwoven fabrics for diapers for children and adults, feminine hygiene products and wipes. Avgol also manufactures non-woven fabrics as a raw material for products which are not necessarily for hygienic applications such as in agriculture, furniture, upholstery, disposable clothing, construction industry, filtration products, and other technical applications. During 2020, the company began manufacturing and selling fabrics for personal protective equipment for masks, bathrobes and medical and hygienic products that were used to deal with the COVID-19 (corona virus) crisis.
During the first half of 2020, the company identified the potential and shortage in non-woven fabric production required for the production of these products and quickly adapted its production lines to support manufacturers of these medical products and satisfy market needs accordingly. As a result, this event had a positive impact on the company’s performance in 2020 The demand for fabrics for personal protective equipment products continued to be high throughout the year, however a significant increase in supply led to the prices and profitability of these products gradually stabilizing.
The company reported its financial results for the fourth quarter of 2020 and for the entire 2020 year.
Company CEO, Shahar Rahim:
Avgol continued to demonstrate in the fourth quarter, similar to the entire 2020, the resilience and strength of the company during the Corona crisis. During the year, Avgol presented its commitment to stability and growth in changing market conditions. Avgol continues to prove that it is one of the leading companies in the hygiene market, and has the ability to operate effectively in a variety of sites and areas while constantly maintaining high quality and excellent service.
One of Avgol’s main goals is to continue to identify and realize opportunities in innovative areas and products in the hygiene market and in tangent markets, while placing special emphasis on the field of sustainability, with the desire to be partners and take part in improving the environment and life.
2020 is a year in which the main task has been to ensure the continuity of business activity both for us at the global level and for our customers, and we are proud that we have met the task with great success. At the beginning of 2021 we see that the high demand for non-woven fabrics continues even more, however we see that there are global problems in the ability to supply polypropylene regularly, both due to severe weather events and due to high demands exceeding supply.
This trend causes a significant price increase that began in the fourth quarter of 2020 and continues more sharply in January and February, especially in North America. At present we continue to follow developments closely, in order to ensure the continuity of production and supplies. During 2020, despite much uncertainty in the market and frequent changes in demand and product types, all our factories worked efficiently and excellently, while constantly maintaining worker safety and health.
The company ends the year with a high cash balance, after a strong operating cash flow of about $ 100 million. During the year we made ad hoc investments in tangent technologies (MeltBlwon) on our site to support the demand for non-woven fabrics for medical products and we intend to continue to develop these capabilities in the future.
During the year we decided to move a production line from Israel to India in order to support a developing market whose demand for our products is growing significantly. We plan to complete the project by the end of the year. At the same time, yesterday the company’s board of directors approved an investment of about $ 70 million, including the construction of a building and warehouse, the purchase of a new and advanced line, as well as additional complementary equipment to expand our capabilities to manufacture products for the medical market in Russia. The market in Russia and the former Soviet Union is a fast growing market and today we are leading the non-woven fabric market to the hygiene industry. With the addition of the advanced technology of the new line we expect to maintain the lead in this market with the newest and most developed products.
This information is information derived from future visions based on information known to the Company at the time this report is published. This information may not materialize or materialize in a manner different from what is expected, inter alia, if there is a significant change in trends / trends, or other parameters that may affect the Company’s production costs or sales prices.
The company’s revenues in 2020 and the fourth quarter include revenues from fabrics for medical products with higher profitability than the average profitability of fabrics for hygiene products. Neutralizing the line’s activity in Barkan, whose activity was reduced throughout 2020 until the end of its activity in the third quarter, the amount sold in 2020 and in the fourth quarter increased relative to the corresponding periods.
During the first quarter of 2020, Avgol renewed agreements with major customers. Some of the agreements are for a period of one year and others for a period of two years. The agreements include expected growth in sales volume, which is accompanied by discounts on prices given. Avgol was able to offset some of the impact of the price discounts by improving the raw material purchase agreements signed for 2020 and by continuing to improve the company’s operational efficiency.
Gross profit in the fourth quarter of 2020 amounted to $ 19.3 million, which is about 20.1% of total revenue, compared to gross profit of $ 18.7 million in the corresponding period last year, which was about 18.3% of total revenue for that period.
Gross profit during the quarter, and after neutralizing the effects of the changes in raw material cost indices between the periods, is about $ 4.9 million higher than in the corresponding period last year. As a result of the increase in raw material prices, a loss of about $ 3.6 million net was recorded in the margin between the raw material price indices, compared to a profit of about $ 0.7 million in the corresponding quarter last year (total negative effect of $ 4.3 million compared to the corresponding periods last year).
The increase in gross profit in the fourth quarter of 2020 compared to the corresponding period last year and after neutralizing the effects of changes in raw material cost indices is mainly due to the high gross profit generated from the sale of fabric products for medical uses, the increase in hygiene products in China sold at Spot prices. . Most of the offset in the increase in profitability was due to price discounts given to the company’s main customers.
The increase in gross profit was largely due to excess demand at high prices for non-woven fabrics which are used to manufacture medical and hygienic products which are meant to deal with the corona crisis. The company identified the potential and shortage in the production of nonwoven fabrics required for the production of these products and quickly adjusted the production lines in order to support manufacturers of medical products and meet the market demands.
In the second half of 2020, the volume of demand, prices and profitability of these products is on a steady downward trend.
During the fourth quarter of 2020 and as of the date of publication of this report, raw material price indices began to rise. Given that this trend will not change, the Company anticipates that this trend will have a negative impact on the results of the first quarter of 2021.
In 2020, Avgol recorded higher-than-average gross profit margins in previous years, mainly from sales of fabrics for the manufacture of medical-use products supplied in the second quarter of 2020. And the significant global rise in prices of these products during the corona crisis. Maintaining these profitability rates depends largely on the behavior of the markets and the volume of supply and demand.
This information is information derived from future visions based on information known to the Company at the time this report is published. This information may not materialize or materialize in a manner different from what is expected, inter alia, if there is a significant change in trends / trends, or other parameters that may affect the Company’s production costs or sales prices.
EBITDA in the fourth quarter of 2020 amounted to approximately $ 17.6 million, an increase of $ 1.5 million compared to the corresponding period last year. After neutralizing the effects of changes in raw material cost indices (both in buying and selling prices), the Underlying EBITDA in the fourth quarter of 2020 amounted to $ 21.2 million, $ 5.8 million more than in the corresponding period last year.
EBITDA in 2020 amounted to $ 89.4 million, an increase of $ 25.4 million compared to 2019. After neutralizing the effects of changes in raw material cost indices, the underlying EBITDA in 2020 amounted to $ 89.8 million, $ 32.9 million more than in the same period last year.
The sharp rise in profitability and profitability in 2020 and during the fourth quarter was mainly due to the increase in demand for fabrics which are used to manufacture products for medical and hygienic uses as a result of the global corona crisis.
The sharp increase in profit mentioned above is almost entirely reflected in Underlying EBITDA during 2020 and during the fourth quarter of 2020 compared to the corresponding periods last year.
|
|
2020 |
2019 |
|
Underlying EBITDA |
USD 89.8 million |
USD 56.9 million |
|
One-time expenses (1) |
– |
USD 3.0 million |
|
Underlying EBITDA after neutralizing one-time events |
USD 89.8 million |
USD 59.9 million |
|
|
Q4 2020 |
Q4 2019 |
|
Underlying EBITDA |
USD 21.2 million |
USD 15.4 million |
|
One-time expenses (1) |
– |
USD 1.2 million |
|
Underlying EBITDA after neutralizing one-time events |
USD 21.2 million |
USD 16.6 million |
(1) During 2019, the Company recorded a one-time expense arising mainly from bonuses in the amount of approximately $ 1.8 million. In addition, in the fourth quarter of 2019, an additional one-time expense was recorded in the context of an adaptation fee clause for Barkan plant employees of approximately $ 1.2 million. After neutralizing the effects of the indices and non-recurring expenses as indicated in the table above, the Underlying EBITDA in 2019 and the fourth quarter of 2019 amounted to approximately $ 59.9 million and approximately $ 16.6 million, respectively.
Cash flow – Cash flow from operating activities in 2020 amounted to approximately $ 101.5 million, compared to $ 20.8 million in the corresponding period last year.
The increase in cash flow was mainly due to the decrease in the volume of customer balances on the balance sheet as a result of the non-recourse reduction of $ 12.2 million during the period (during the corresponding period last year, the volume of factoring decreased by $ 39.3 million).
Excluding changes in production volumes and discounting of customer balances during the period and during the corresponding period last year, cash flow from operating activities during the period amounted to $ 89.3 million, compared to $ 60.1 million during the corresponding period last year.
In 2020 the net profit, and working capital items in the balance sheet increased compared to 2019; The increase was partially offset as a result of a decrease in financing expenses in respect of the debentures issued by the Company, and a decrease in inventory levels between the years.
The company met the budget targets it set for itself and ended the year with a positive cash flow (including receiving an investment grant in the Negev) that amounted to more than $ 100 million.
Other major landmarks:
Net financing expenses in the fourth quarter of 2020 totaled $ 6.6 million, compared to $ 4.1 million in the same period last year. The increase in financing expenses during the fourth quarter was mainly due to expenses from exchange rate differences that amounted to $ 3.9 million, compared with financing expenses from exchange rate differences that amounted to $ 0.5 million during the corresponding quarter last year. The changes in the exchange rate differences as aforesaid are mainly attributed to the revaluation of the liability in respect of part of the C series of bonds, which is not hedged against the dollar.
This increase was partially offset by a decrease of approximately $ 0.7 million in interest expenses related to long-term loans and bonds compared to the corresponding quarter last year (repayment of principal payments in accordance with the payment schedule; the company did not take on new long-term loans or issue new bonds).
Net income for the fourth quarter of 2020 was $ 2.4 million, compared to net income of $ 3.6 million in the same quarter last year. The decrease in net profit during the fourth quarter of 2020 compared to the corresponding period last year was mainly due to the increase in financing expenses and income tax.
Net income for 2020 amounted to $ 36.9 million, compared to about $ 12.3 million during the same period last year.
The increase in net profit for 2020 compared to the corresponding period last year was mainly due to the increase in gross profit and operating profit, as well as the decrease in net financing expenses, which were partially offset by the increase in income tax expenses.
Corona virus – Despite events related to the corona virus, the company continued to fully and routinely operate all its plants around the world, in recognition of the fact that these plants are essential in all areas of activity in which Avgol operates, except the company’s website in China which closed temporarily at the end of January 2020 The corona and returned to activity on March 8, 2020. Moreover, the company continued to produce fabrics that support the production of medical products used to deal with the corona virus, such as masks and robes. During the period, there was also an increase in demand from private customers and in support of the local authorities in which the company operates.