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Published
May 28, 2009
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Czech Pegas Q1 profit beats forecast, ups dividend

By
Reuters
Published
May 28, 2009

PRAGUE, May 28 (Reuters) - Textile maker Pegas Nonwovens (PGSNsp.PR) posted a forecast-beating 59.3 percent year-on-year jump in first-quarter operating profit, as it drew down inventories and benefited from lower input prices.


Pegas Nonwovens

The Czech group's operating result rose to 10.21 million euros, beating the average estimate of 9.15 million euros from analysts in a Reuters poll, although the company warned on Thursday 28 May coming quarters would be tougher.

Revenue dropped 5.5 percent to 35.66 million euros, besting analysts' estimates of 33.34 million.

Net profit was down 41.5 percent at 6.77 million euros due to non-cash debt and interest swap revaluation, higher than a 5.22 million forecast.

Shares in the group rose 2.4 percent to 348 crowns at the Prague open.

The company said a drop in polymer prices boosted the quarterly results, while conversely higher prices last year bettered their sales prices as they set contracts ahead.

"However, these... factors will not be repeated in such a positive way in subsequent quarters," Chief Executive Frantisek Rezac said in a statement.

"Due to continuing good demand, we are confident that we will maintain both production and sales volumes at good levels for the remainder of 2009."

In February, Pegas forecast earnings before interest, tax, depreciation and amortisation (EBITDA) would drop up to 10 percent this year, and it has said slowing demand in the economic slump would force it to cut margins in the following months.

The company proposed paying a 0.9 euro per share dividend from last year's profits payable in the third quarter, up from 0.85 euro the previous year.

Pegas shares have dropped 28 percent in the past 12 months, but are up 40 percent since March.

(Reporting by Jason Hovet; editing by Simon Jessop)

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