Poland

In Q1 2020, Boryszew Group (“Boryszew”) generated consolidated revenues of PLN 1.6 billion, with the consolidated EBITDA of PLN 81 million.

The Company’s consolidated revenues were up by 5% against the corresponding period of the previous year. The largest revenue growth (up by 16%) was generated by the Metals Segment, with the Segment’s EBITDA improving by more than 19%. At PLN (-)38 million, the Group’s consolidated net result was impacted by currency exchange rate fluctuations.

In the first quarter of 2020, the Group’s performance was negatively impacted by the COVID-19 pandemic. However, despite the negative market conditions, growth was recorded in the Metals Segment.

“The state of epidemic emergency declared in Poland at the end of the first quarter had no significant impact on the performance of the Metals segment. This was due to the investment projects we had previously implemented there which improved considerably the overall efficiency of the entire Segment. Consequently, this translated into an increase in the revenues and EBITDA generated, which stood at PLN 1.05 billion and PLN 69.3 million, respectively,” said Piotr Lisiecki, President of the Management Board and CEO of Boryszew S.A.

Still, the pandemic brought a general economic downturn as well as restrictions which were imposed on the production mainly in the Automotive Segment. As a result, the Company’s profitability in this Segment dropped, with the Segment’s Q1 2020 EBITDA down by nearly 70% year-on-year. This in turn led to the breach of financial covenants agreed by the Group with the lending institutions as regards the net debt-to-EBITDA ratio.

“Since Boryszew Group’s Automotive Segment operates globally, the first effects of the global pandemic were noticeable in the Segment’s operations as early as at the beginning of 2020. The first to be affected by COVID-19 was our production plant in China, but at the end of March we were also forced to temporarily suspend production in all the remaining plants of both Maflow Group and BAP Group,” Boryszew CEO Piotr Lisiecki explained.

In view of the situation, Boryszew’s Management Board asked the crediting banks to waive any potential penalties for covenant breaches applicable under the concluded loan agreements and to agree to a temporary change of the required values of financial ratios in the covenants of those agreements.

“According to the response we have received from our lenders laying down the timeframe for making decisions on whether to agree to our requests, we should be informed of them in early July,” CEO Piotr Lisiecki stated.

Thanks to its business agility and highly diversified product portfolio, Boryszew Group could quickly respond and adapt to the dynamically changing market conditions. To meet the demand, Boryszew ERG launched the manufacture of ERG CleanSkin, the new product line of virucidal disinfectants, which allowed the company to maintain its plant’s production output at an unchanged level. Consequently, the Chemicals Segment’s EBITDA amounted to PLN 5.4 million, significantly more than projected, while its revenue reached PLN 60 million.

“Clearly, Boryszew ERG hit the bull’s eye with the launch of ERG CleanSkin. Thanks to the constant supply of the legally required disinfectants for all Boryszew Group plants, we could continue production in all our plants without any disruption during the state of epidemic emergency. To take advantage of the changing market conditions, we managed to build and open in a record-short time a completely new production line for ERG CleanSkin,” CEO Lisiecki commented.