Semperit lowers 2021 earnings forecast in wake of raw materials woes

VIENNA—Semperit A.G. Holding has marginally lowered its earnings forecast for 2021 as the business environment remains challenging with continued raw materials woes.

In a Nov. 17 statement, Semperit said it expected EBITDA (earnings) to be significantly above the previous year's levels, but to fall short of the earlier estimate of $446 million (€395 million) by "a single-digit percentage."

Semperit announced in March that it expected full year earnings to reach $446 million, depending particularly on "the timely availability of raw materials and their price development, the sales prices for medical protective gloves, and sufficient logistics availability for the delivery of goods."

In its latest financial report, the group said the risk factors communicated in the first quarter had "progressively materialized" and "continue to exist," prompting the revision in outlook.

Over the first nine months of the year, Semperit "defied increasingly challenging market environment," posting record earnings at $365 million, up 174 percent compared to the same period last year.

Overall sales rose 41 percent year-on-year to $1.04 billion, reflecting a 79-percent increase in medical sales to $583 million and an 11-percent rise in industrial sales to $461 million.

Breaking down the figures, the industrial sector, which includes the hose production unit Semperflex, seals business Semperseal, conveyor belts segment Sempertrans and profiles manufacturer Semperform, reported a 1.2-percent decline in earnings to $72.8 million during the nine-month period.

In particular, Semperflx and Semperseal segments posted strong growth in sales, helped by demand for hydraulic and industrial hoses, as well as economic recovery of the European markets.

In contrast, production and sales volumes were down in the Sempermed medical gloves business, due to Covid-related movement restrictions in Malaysia in July and to limited availability of containers.

Nevertheless, "significantly higher sales prices" attributable to the ongoing coronavirus pandemic and the increase in demand boosted segment revenue and raised earnings by more than 310 percent to $312 million.

"We are posting excellent revenue and earnings figures for the first nine months and are on track to achieve an all-time record result for the full year 2021," said CFO Petra Preining.

"Encouragingly, we are seeing a strong recovery in the order book, particularly in our industrial sector, which is our main focus of attention, and look set to exceed pre-crisis 2019 levels," said Chief Operating Officer Kristian Brok.

In contrast, the official said the specific effects on glove prices in the medical business "have clearly passed the plateau," and the group is increasingly faced with falling average prices since the second quarter.