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Finland-based Suominen Corporation on Oct. 26 reported in its 3Q 2022 financial results showing sales were Euro 131.9 million, higher by 34% from a year ago, with operating profit of Euro 2,000 reversing a loss of Euro 8,000 in 2021. EBITDA in the quarter of Euro 5.1 million was up 21%.
Through nine months, total sales of Euro 360.2 million were up 10% from a year ago, with operating profit of Euro 7 million higher by 15%. EBITDA of Euro 10.3 million fell 73% from 2021.
“After a difficult first half of the year, Suominen’s result started to turn around in the third quarter,” said company Pres/CEO Petri Helsky. “We reached all time high quarterly net sales in Q3 through improvement in both volumes and prices and tailwind from currencies. Our sales volumes increased in comparison to both Q3/2021 and Q2/2022 driven especially by improvement in North America. Margins were still lower than a year ago but improved slightly versus the previous quarter.”
“The higher sales and production volumes impacted the result positively, but our sales price increases could not fully compensate for the higher raw material and energy costs even despite the previously implemented energy surcharge in Europe,” he added. “Other operating income was impacted positively by one-time tax credits and incentives in Brazil and Italy.”
In response to significant price increases in raw materials, energy and freight, the company in August announced surcharges on all its products in North America, and in September added a new energy surcharge in Europe while expecting cost inflation to continue into the winter months.
On “short term risks and uncertainties,” the company noted significant volatility and inflation, depending on how the markets develop.
“Regarding the war in Ukraine, the direct impact to Suominen’s business is minor as we have no customers nor suppliers in Russia, Belarus or Ukraine,” the company added. “Suominen as a company is mostly affected by the indirect economic impacts of the war which contribute to the cost inflation mentioned above.”
“Also the Covid-19 pandemic can still cause uncertainty in Suominen’s business environment,” the company continued. “The key risks related to the virus concern the health and safety of Suominen personnel and customers, possible shortages of raw materials and issues linked to logistics, as well as potential closures of customers’ or our own plants due to virus infections. Despite the inflation and supply chain challenges caused by the pandemic straining the whole nonwovens industry and its value chain, we have not experienced more payment delays than usual by our customers and hence we do not see that our customer credit risks would have materially increased.”
Suominen, a portfolio company of Ahlström Capital, says it is the global market leader in nonwovens for wipes, and among the largest spunlace nonwovens producers in the world.
The company’s long-term outlook was that end user demand for wipes will remain above pre-Covid-19 levels.
“However, the pandemic-caused demand spike followed by moderation of said demand has led to an inventory imbalance in the whole supply chain especially in the US which still partially persists,” the company said.
By geographical market area, Suominen sales for nine months were Euro 210.5 million in North and South America, Euro 2.5 million in Finland, and Euro 145.8 million in the rest of Europe.
The company’s global manufacturing platform comprises eight production plants on three continents, including Nakkila, Finland; Alicante, Spain; Cressa and Mozzate, Italy; Paulínia, Brazil; and three in the US, in Bethune, SC; Green Bay, WI; and Windsor Locks, CT.