ORZEŁ BIAŁY GROUP completed the first quarter of 2018, with the EBITDA result understood as earnings on operating activities before depreciation/amortisation at the level of PLN 8.4 million, which represents an increase of 117% as compared to the same period last year, mainly due to favourable cost structure of raw materials used for production.
In the first quarter of 2018, ales revenues of the Group were on the level of revenues of the previous year and were, after positive adjustment for the result on lead price hedging transactions at PLN price +86,000, PLN 163,028,000.
The volumes of lead shipments in the first quarter of 2018 amounted to 16.3 kt, while in the corresponding period of the previous year they were 17.7 kt. In addition, there was a positive balance on the result on hedging transactions as compared to the same period last year.
The increase in the net result was influenced by the profit on financial activities in 2018 in addition to the main operating activities. At the same time, the corresponding period of the previous financial year reported a loss on financial activities.
In the reporting period, Orzeł Biały S.A. together with financial advisor ING Bank N.V. London branch initiated efforts to acquire a strategic investor in order to prepare the Company for the potential implementation of the recommended scenarios resulting from the LNG review outcomes of strategic options available to the Company that may bring an increase in the shareholders value of Orzeł Biały Group.
An important event in the first quarter of 2018 was the lost control by Orzeł Biały S.A. over its subsidiary Orzeł Surowce and its member companies, as a result of the announcement on 26.03.2018 of the bankruptcy of Orzeł Surowce. As a consequence, these companies were excluded from consolidation. As a result, Orzeł Biały S.A. made write-offs, the total value of which decreased the separate operating result for the first quarter of 2018 by PLN 3.7 million. These write-downs did not affect the consolidated financial statements of the Company. In addition, this event is of no material impact on the going concern of Orzeł Biały S.A.
"We disagree with the decision issued by the Court as regards the bankruptcy of the subsidiary Orzeł Surowce because we believe it is unfounded. Orzeł Surowce pays its cash obligations on an ongoing basis and there is no risk of losing the ability to meet such obligations. The applicants failed to show any evidence of possible bankruptcy of Orzeł Surowce, and the actions taken serve in our assessment to harass Orzeł Biały Group. That is why we lodged a complaint against the issued decision and we expect its positive consideration by the District Court."- says Michael Rohde Pedersen, President of the Management Board of Orzeł Biały.
Orzeł Surowce Sp. z o.o. received in response to the submitted application the decision of the Court to suspend liquidation until the decision of the Court regarding the declaration of bankruptcy becomes final. The company continues its operations based on an agency agreement.
To sum up, it was a good quarter and a well-started year - "I am satisfied both with the achieved results of Orzeł Biały Group and sustained growth of our core business, i.e. recycling and refined lead production." - says Michael Rohde Pedersen, President of the Management Board of Orzeł Biały.