Negative impact on revenues on a year-on-year basis was due year-on-year impact of IFRS 15 adjustment, on the basis of which the group recognizes revenues from finished products, which are produced on order for a specific customer, immediately following the production of the given product.
“The EBITDA of CZK 605.8 million ($26 million) achieved in the first half did not fully meet our expectations, falling by 8.5% year-on-year. Sales volumes grew on a year-on-year basis, which resulted in a reduction in inventories of finished products to long term record lows. This situation then led to low production effectiveness as a result of its frequent changes. It was primarily for this reason that we recorded a year-on-year decline in production volume by almost 1,300 tons in the first half and this loss then had a significant effect on the financial results of the Group.
“The development of indebtedness saw the net debt declining by almost 11% compared with the end of last year. The net debt to EBITDA ratio at the end of the first half reached 3.23x.
“Our investment projects are continuing according to plan. The production plant in South Africa is complete and commercial production was launched in June. The installation of a new semi-commercial production line in Znojmo-Přímětice is likewise continuing in line with our expectations and thus we continue to plan for its commercial operation during the fourth quarter of 2019,” says Marian Rašík, chief financial officer and Member of the Board of PFNonwovens a.s.