Lecta publishes its Q2 2019 results
In 2Q2019, the net sales of Coated Woodfree were €160 million vs €185 million in 2Q2018, a decrease of €25 million or -14%. The Ebitda at €11 million was lower than in 2Q2018 (€21 million). This decrease was mainly due to a reduction in sales volume and an increase in distribution costs, partly offset by an increase of net sales price and a reduction of variable production costs and fixed expenses.
In June 2019, a new Enterprise Resource Planning system was implemented in Lecta’s Riva del Garda Italy paper mill. Implementation was more challenging than expected, resulting in a loss of production deliveries of CWF from the mill, as well as extra cost. The estimated and accounted for EBITDA impact in 2Q 2019 was negative €(1.9) million.
Lecta temporarily shut down Line 8 at its Condat mill in France starting at the end of April 2019. The decrease in CWF demand over the last several years resulted in overcapacity in the industry. The worsening of this trend observed in the last months is the main reason for this decision.
The Condat brand product range and service levels during this period are guaranteed due to efficiency improvements and streamlining on Condat’s Line 4 as well as through the contribution of the Group's other CWF paper mills.
Despite the temporary shutdown, meeting the overall demand of Lecta's CWF customers is assured, given the Group's total production capacity of more than 850,000 tons per year.
At the same time, Lecta continues working on a strategic transformation plan that will allow Condat to diversify its production. This plan would entail the transformation of Line 8 from manufacturing CWF to manufacturing specialty papers for labels and flexible packaging, a market in which Lecta has extensive experience given its manufacturing operations in Spain.
Lecta Group is engaged in the production and sale of Coated Woodfree (“CWF”) and Specialty papers. Lecta Group has production sites in France, Italy and Spain and sells all around the world. It employed circa 3,170 FTE people in the quarter ended 30 June 2019.
The parent company of the Lecta Group is Lecta SA, a limited company incorporated and domiciled in the Grand Duchy of Luxembourg.
Lecta Group as at 30 June 2019
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