“Overall, we succeeded well in the first quarter of the year. Our net sales, market share and EBITDA continued to grow in line with our strategy. Our liquidity was at a good level at the end of the review period. We made the withdrawal of the second of the two EUR 2 million instalments of the net working capital loan we announced in December 2022. The loan enables us to prepare for growing volumes, ensure the availability of key materials and enable us to continue the implementation of our development activities.
The availability of raw materials and other materials improved during the first quarter of 2023, but the accelerating inflation has continued to keep costs at an exceptionally high level and even on the increase. This is also reflected in salaries through the collective bargaining agreement in our industry, causing our costs to increase clearly. These factors burdened our profitability somewhat during the first quarter. We have agreed on the transfer of non-indexed cost increases to our customer prices where applicable.
In terms of our main raw materials and electricity, the cost development is mainly tied to our customer agreements through indices that are reflected quarterly in our sales prices with a delay. The worst electricity price fluctuations and peaks have clearly stabilised since the end of 2022, which is why our electricity index in relation to the real cost of electricity in the first quarter had a somewhat favourable impact on our profitability.
In our most energy-intensive operations, we increased night-time production in the first quarter. This contributed positively to the national management of the electricity system in Finland. The stabilised situation in the electricity market has also allowed a return to normal production shift arrangements in the end of the review period.
In our own operations, we have successfully managed our supply chain and secured our production and deliveries to customers in a constantly changing operating environment. Our measures to improve production quality and productivity at our Karkkila foundry have also progressed, and the performance indicators developed favourably during the first quarter of the year.
Our employees’ resilience and strong commitment ensured a solid foundation for positive development. Our human resources correspond to our current production needs, and our ability to respond to changes in the operating environment has enabled us to maintain good service capability.
The prolonged Russia’s war of aggression on Ukraine has increased the overall uncertainty of the market and the rising cost trend arising from inflation. However, the impacts through our customers’ and suppliers’ business operations have been minor. We are actively monitoring developments in our business environment and seeking to ensure the availability of raw materials and good delivery capability in all situations and circumstances.
Our customers’ order backlogs, forecasts and expectations remained generally positive during the first quarter of 2023, and our order book was at a strong level at the end of March. However, the general uncertainty has increased the average decision-making time of our customers from request for quotation to acceptance of the offer. On the other hand our customers are moving their production chains more actively closer to Europe and its neighbouring regions for improved operations in terms of risk management and sustainability. Thanks to the current customer outlook and our own sales success, our expectations for 2023 continue to be positive.
We will actively continue our efforts to strengthen our market position and further improve our profitability as part of our growth strategy. In addition, we are focusing on our service capability, close customer relationships and highly competent personnel, as well as on expanding our offering. Sustainability is taken into account in the different phases of our production. We are aiming for close partnerships with our customers and to be their preferred supplier with an extensive offering and excellent service.”