HELSINKI - Despite an increase in sales, nonwovens manufacturer Suominen slumped to a loss in its latest quarter, with its performance adversely impacted by the significant cost inflation in raw materials, energy and transportation.
Net sales for the April-June 2022 period increased by 4% to €118 million, but comparable EBITDA dropped to €1.9 million from €15.3 million leading to net loss of €2.3 million, down from a profit of €6.1 in the same period last year.
Announcing the results, Petri Helsky, Suominen's president & CEO said the company had experienced a challenging first half of the year. "The first half of 2022 was difficult for Suominen," he said, noting that it did not see an improvement in demand for the hard surface disinfectant products which has been suffering from the high inventory levels in the US supply chains. "Overall our sales volumes improved slightly from the previous quarter but remained well below the corresponding period last year. When it comes to raw materials, energy and transportation, there was another steep hike in these costs in the second quarter. Due to the lag in our sales pricing mechanisms our sales prices did not fully reflect the cost increases. Especially in Europe, the cost inflation was made worse by the war in Ukraine."
The quarter has also seen the company continue to develop its sustainable product offering. To support its product development in nonwovens biodegradability, it has built its own compostability Green Lab test centre at its facility in Nakkila, Finland and the first tests have already started. During the second quarter, Suominen also announced an investment to enhance and upgrade one of its lines in Nakkila, an investment that is also expected to strengthen its capabilities in sustainable products.
"We are continuing to identify and implement actions to improve our financial performance," Helsky added. "As described in our previous interim report, we implemented an energy surcharge to all our products sold in Europe in mid-March which took effect in Q2. We have also progressed in our work on widening our product portfolio in the US at the production lines suffering from the inventory imbalance and we expect demand improvement for these lines in the second half of 2022 based on new contracted volumes. On the operations side we have launched a development program to further improve our raw material efficiency."
