The company reported net sales of $45.9 million in the second quarter of 2018, up 19.3% compared to the year-ago period. Converted product sales were $40.7 million, a year over year increase of 17.3%, and parent roll sales were $5.2 million, up 38.0% over the second quarter of 2017. Gross profit in the second quarter of 2018 was $0.6 million, a decrease from $1.5 million in the second quarter of 2017. Gross profit margins decreased from 3.9% in the second quarter of 2017 to 1.3% in the second quarter of 2018. Orchids had a second quarter operating loss of $5.3 million in 2018 compared to an operating loss of $2.0 million in the second quarter of 2017. The increase in the operating loss was driven primarily by SG&A increasing to $5.7 million in the second quarter of 2018, up $2.4 million from $3.3 million in the year-ago period. Click Read More below for additional information.
Heinzel Group recorded the best result in its history. In addition to the positive market price development, it was above all the record output of roughly 1.6 million metric tons in the group’s mills that caused net revenues to increase from EUR 1.8 billion to roughly EUR 2.1 billion. The group thus surpassed the EUR 2.0 billion revenue mark for the first time in 2018.
The group’s operating result (EBIT) of EUR 194.8 million (2017: EUR 73.6 million.) is primarily attributable to strong production, high market prices for paper and pulp, and low recycled paper costs. On this basis, net income, at EUR 145.0 million, also significantly exceeded the prior-year level (EUR 55.0 million).
Along with this strong operating development, Heinzel Group also expanded its field of activity again in 2018: To strengthen its global presence, heinzelsales acquired a trading company in Malaysia in the past year. Europapier took over Moderne Verpackung Hoffmann, a specialist for industrial packaging solutions, while Bunzl & Biach secured its future supply with recycled paper by acquiring further shares in companies in Eastern Europe.
Heinzel Group also continued to pursue its investment strategy. Overall, the group invested roughly EUR 127 million in 2018, of which the majority was related to the Austrian mills in Pöls (construction of the new PM3 specializing in kraft paper3) and Laakirchen (completion of the conversion of the PM10 to containerboard). In addition, an aerobic wastewater treatment plant was established at the mill in Estonia.
Heinzel Group will continue its organic growth in 2019. The PM3 in Pöls will have started operations by mid-year and the first step of the planned capacity expansion at the Estonian pulp mill should be finalized by then. Other plans provide for a further capacity increase for graphic paper on the PM11 in Laakirchen and a production increase on the PM7 in Raubling. In the Trading Business, the focus will be on the integration and the further development of the companies acquired in 2018 as well as overseas sales of the additional volume of the group’s own production.