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Krynica Vitamin generates higher profit despite lower revenue  in H1 of 2022 - Krynica Vitamin

01 Sep 2022

Krynica Vitamin generates higher profit despite lower revenue in H1 of 2022

In the first half of 2022 Krynica Vitamin SA, a company listed on the Warsaw Stock Exchange, generated 13.5 million PLN of EBITDA (an increase of 18% y/y), as well as 5.7 million PLN of net profit (an increase of 20% y/y). Sales revenue fell by 11.5%, or 179 million PLN compared to the same period in 2021, due to a change in the company’s business model.
Beverage production based on raw materials and packaging entrusted by customers, which constituted a change in the company’s business model to date, was the key factor influencing Krynica Vitamin’s financial results in H1. This translated into lower sales revenue for the company, despite higher EBITDA and net profit.
"EBITDA increased by 2.1 million PLN compared to the first half of 2021, despite rising labor and production costs was well as rampant inflation. At the same time we faced a drastic increase in debt service costs, disruption in supply chains and increasingly negative macroeconomic and geopolitical environments due to the war in Ukraine. Market conditions remain uncertain making price forecasting for raw materials, packaging or transport difficult – says Piotr Czachorowski, President of the Management Board of Krynica Vitamin SA.
Going forward one of the challenges facing Krynica Vitamin in the upcoming autumn and winter is the risk of interruption in energy supplies with respect to natural gas and electricity.
"No electricity or gas supplier will guarantee continuity of supply, but we have taken a number of measures to mitigate this risk. We have invested in the thermo-modernization of pipelines transporting steam and hot water, as well as heat exchangers and heating devices. This reduced Krynica Vitamin’s energy consumption. In addition, despite the replacement of diesel steam boilers with gas powered boilers, we left ourselves the possibility of alternatively supplying one of the boilers with oil if gas shortages were to occur. This allowed us to reduce the risk of limiting or suspending beverage production in the 9th power supply stage  or higher. We expect the energy market to remain volatile in the coming months – added Piotr Czachorowski.
In the first half of the year, Krynica Vitamin produced 262 million beverage units, an increase of 23% y/y from 213 million units in the same period of 2021.
 "Higher production volume translated into higher EBITDA and net profit. We saw a 25% increase in the production of beverages in aluminum cans – from 189 million units in the first half of 2021 to 236 million units in the current accounting period. Aluminum cans remain the packaging of choice for our clients. Aluminum is ubiquitous, light in transport and environmentally friendly because it can be recycled indefinitely. In H1 Krynica’s production of beverages in PET bottles remained unchanged. Meanwhile, the share of glass packaging formats continued to grow as we take  action to further develop the glass segment – said Piotr Czachorowski.

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