MRI advances sales, earnings despite headwinds

MILAN—Despite a range of challenges, Manuli Rubber Industries (MRI) posted a 35.6-percent year-on-year rise in consolidated operating profit (EBIT), to $53.4 million, on 2021 sales 16.4 percent higher at $524.4 million.

The higher earnings were driven by an increase in sales volumes and pricing, which offset significant rises in operating costs on several fronts, according to the Italian group's March 31 financial statement.

MRI described its raw materials situation as "the worst in the last decades" with poor availability and cost increases adding nearly $15 million to costs.

"For the first time we have also lost output due to unstable energy supplies in China, where we suffered plant shutdowns due to lack of power in Suzhou," MRI also pointed out.

While the group did not experience energy-supply disruption in Europe, the cost of both electricity and gas in 2021 "literally exploded to levels unseen in decades," the company said.

COVID-19 presented a further challenge in 2021 for MRI with 1,300 people, 30 percent of the total work force, placed in quarantine after testing positive despite a range of preventative measures.

MRI reported that its Malaysian hose plant was hit particularly hard by a government mandated total lockdown lasting four weeks during the third quarter of last year.

COVID-19 and other illness absenteeism rates were also "sky-high" in Poland and the Czech Republic during 2021 due to "a cultural lack of trust" in vaccines in Eastern Europe, the group further noted.

Overall, the increased absenteeism rate generated significantly higher overtime costs and loss of productivity in plants across all divisions, according to the Italian rubber components maker.

Logistics issues added to MRI's difficulties, as a global scarcity of ships coupled with ports congestion and a lack of truck drivers pushed transportation costs and delivery times up significantly.

The situation made it "extremely difficult to provide a high service level to customers, while also forcing a significant expansion in inventory levels, including stock-in-transit," reported MRI.