Pegas Nonwovens in 2Q13 with stable revenues, but weaker numbers versus market expectations

Conference Call: Thursday 29th August at 5pm (CET)
* Reuters cons. (7)

Earnings came below consensus expectations due to lower production. EBITDA grew 12.4% y/y to 9.1 mln. EUR as it was positively affected by the development of polymer prices. Excluding this impact, the achieved EBITDA fell below the company‘s expectations primarily due to lower than planned production results. Regarding the improved security situation in Egypt, this week the company renewed the pilot operations at the Egyptian production line.

According to Pegas, the contribution of Egyptian plant represents the greatest unknown variable with respect to the outlook for the rest of this year. In addition, it is not possible to predict the future development of polymer prices, which have started to rise again in recent weeks. Notwithstanding these circumstances, the company confirms full year EBITDA outlook, though at the lower end of the expected growth range of 5-15 %.

Given the below consensus figs and worsened and uncertain outlook for the remainder of 2013, we expect slightly negative reaction to 2Q13 results.