Hadera Paper Company reports a 22% improvement in EBITDA in the fourth quarter of 2020 compared to the corresponding quarter to NIS 49 million. Revenues in the quarter amounted to NIS 363 million, compared with NIS 373 million in the corresponding quarter last year. The decrease in sales turnover was mainly due to a decrease in the stationery and printing sector in the amount of NIS 27 million due to a significant decrease in the quantity produced and sold, due to the general restrictions and closures imposed and the closure of many educational institutions. In addition, revenues in the office needs marketing sector decreased by NIS 4 million, also against the background of the restrictions and closures imposed. The decline in revenues in the stationery and printing sectors overshadowed the increase in revenues in the value chain segments, with an emphasis on sales of the cardboard packaging segment, which increased by NIS 14 million, and in the paper rolls per carton segment, in the amount of NIS 22 million. The increase in these two sectors, compared to last year, was achieved thanks to the increase in production outputs and despite the decrease in sales prices.
The company’s total revenue in 2020 – NIS 1,480 million, compared to NIS 1,617 million in 2019. The decrease in sales turnover was mainly due to a decrease in the stationery and printing securities sector in the amount of NIS 155 million.
Gross profit in the fourth quarter increased by 41% to NIS 62 million (approximately 17% of revenues) compared to NIS 44 million (12% of revenues) in the corresponding quarter last year. Gross profit in the whole of 2020 grew by 10% and amounted to 233 million (about 16% of revenues) compared to NIS 212 million (13% of revenues) last year.
Operating profit (before non-recurring expenses and income) in the fourth quarter amounted to 11 million, compared with a marginal operating loss in the corresponding quarter.
The annual operating profit (before non-recurring expenses and income) amounted to NIS 47 million in 2020, compared with NIS 41 million in 2019.
The improvement in margins is due to the operational efficiencies adopted by the company. EBITDA in 2020 amounted to NIS 194 million, compared with NIS 192 million in 2019.
Against the background of the reports, Gadi Konya, CEO of the Hadera Paper Group, said: “The year 2020, the financial results of which we published today, was characterized by two main trends. The first, a significant operational improvement in all segments of the Group’s value chain and the second, an increase in demand for the company’s products, despite the corona crisis.
“In 2020, the group improved production outputs, to the highest level ever, and in addition, became more efficient. The improvement crosses the entire value chain, from Amnir to Carmel, each of which has increased its output this year considerably. The highlight is the increase in machine output. , Which produces recycled paper rolls for cardboard, which this year produced the largest quantity produced in it since its inception about ten years ago, over 220,000 tons, a figure that until recently was considered the “glass ceiling” of the machine.
“Regarding the resilience of the market in which the three value chain sectors operate, I will note that the demand for the group’s products, which as a vital plant worked around the clock all year round, not only was not harmed, but in recent months there has been sharp growth. Cardboard paper and cardboard packaging products are climbing and are at their highest level in years. The price trend also changed for the better at the end of 2020. In our opinion, the increase in demand for cardboard packaging is preventing, among other things, a significant increase in e-commerce worldwide. Corona year.
“We believe that the operational improvement and high efficiency presented at the Group’s plants, place the company in an excellent starting position for 2021 and we are of course optimally prepared to meet the growing demand.”
Lior Hellman, CFO of the Hadera Paper Group, added: “The company’s strength in both the financial and operational-business aspects stood out positively during the year that ended. The financial expression of the operational improvement can be clearly seen in the rate of gross profit from total revenues, which improved considerably this year. In addition, we are proud that despite the challenges of the “Corona Year” we were able to continue to invest in means of production, for the benefit of continued operational improvement and at the same time, lower the level of debt and leverage. This strength will allow us to continue to develop the company and improve its profitability. The distribution of the NIS 10 million dividend, further evidence of the strength of Hadera Paper, is also carried out while maintaining a low level of leverage. “