Business Review January‒March 2022, 6 May, 2022 / Sami Sivuranta, CEO:
“The first quarter of the year was mainly in line with our expectations in a challenging operating environment. Despite the positive development of operations and volumes, our profitability remained at last year's level, as our result was burdened by costs of EUR 0.3 million regarding to an acquisition that was not realized. In addition, profitability was somewhat burdened by the exceptional price development of materials. Also profitability was affected by the quality and productivity challenges of our Karkkila foundry. In our Karkkila unit, the recovery in demand and very good success in new sales have led to an exceptionally rapid growth in production volumes. This has generated special needs and challenges, both in terms of increasing resources in the workforce and in terms of rapidly increased technical process capacity. However, our activities to remedy the situation in Karkkila are progressing according to plan.
Our net sales continued to grow due to successful new sales efforts, increasing market shares and the general recovery of the market. Our customers' forecasts and expectations for the current year are generally positive and our order backlog is at a very strong level at the end of the review period. The COVID-19 pandemic did not have a material impact on our operations during the review period.
The long-running uncertainties surrounding the availability of raw materials and supplies and the rise in prices continued in the first quarter of 2022. In our own operations, we managed to control our supply chain and secure our own production and deliveries to our customers.
However, the prolonged crisis in Eastern Europe has further increased the uncertainties regarding the availability of materials and, in the short term, raised material prices to record levels. We reacted to this by raising our selling prices temporarily after the review period to compensate the cost increases in non-indexed materials.
Market prices for electricity have started to fall slightly during the first quarter of the year but in general have remained at an exceptionally high level. In terms of our main raw materials and electricity, cost development is mainly tied to our customer agreements with indices that will be revised in sales prices with a delay.
Componenta has no operations of its own in Russia or Ukraine. The direct impact through the business of our customers and suppliers is so far minor. We actively monitor the development of the situation in our own business environment and strive to ensure the availability of raw materials in all situations and circumstances.
Our liquidity remained good throughout the review period and has remained at a good level since the end of the review period.
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 in our service capability, close customer relationships, sustainability and highly competent personnel, as well as in expanding our offering. We are investing in close partnerships with our customers, aiming to be our customers’ preferred supplier with an extensive offering and excellent service.”