2022 was the second-best year in the history of TeraPlast Group, after the record levels of 2021. The group also completed the implementation of the most ambitious investment plan in its history, becoming the largest polymer processor in Central and Eastern Europe.
TeraPlast Group has managed to consolidate its market share in 2022; its leading position will allow it to reap business opportunities once the markets it operates on recover in the coming years. The major investments completed during 2021-2022, in the amount of 219 million lei, are added to those made in recent years with the aim of diversifying the lines of work, the geographical footprint of the Group, increasing the energy independence and to substitute virgin raw materials with recycled material.
At the same time, it is natural that in the first years from commissioning the investments, namely of some new state-of-the-art production capacities, the financial results do not shine against the background of the enormous challenges determined by the unprecedented global and regional economic context. However, the Group constantly looks at a long-time horizon of more than 5 years to maximize the added value for its shareholders. Therefore, the representatives of the Group remain confident in the long-term potential of the investment projects started in recent years.
The decrease from the budget, but also from the 9-month reforecast, was caused by the radical change in the dynamics of the raw materials markets as a side effect of the war in Ukraine. Another impact was the slower start of the Flexible Packaging segment and an underperformance of the Windows & Doors segment, generated by delays in passing costs to the market. The immediate challenges, although they eroded the margins in 2022, did not affect the medium and long-term development of the Group, a development with a growing sustainability component.
For the current year, TeraPlast Group is targeting significant increases in financial performance, estimating an acceleration of infrastructure works, expected at the beginning of Q3/2023 at the latest.
The turnover of TeraPlast Group increased in 2022 by 16% compared to 2021, reaching 711 million lei. EBITDA stood at 52.7 million lei, down 29% compared to the previous year’s result, because of the volatility of raw material prices and a below-estimated level of water & sewage works financed from European and public funding. The Installations & Recycling segment – “the engine of the Group” – despite the most challenging year in the last 5 years, managed to exceed the record EBITDA achieved in 2021. It generated about 97% of the consolidated EBITDA against the background of the increased time needed to reach the “breakeven” of new investments, aimed at diversifying the Group’s business portfolio.
The EBITDA margin eroded during the year and reached 7.4% at the end of 2022. The result was marked mainly by the challenges faced by the Windows & Doors and Flexible Packaging segments, where delays in indexing the selling prices were experienced, respectively high ramp-up and market penetration costs.
