As Marija Brnic/Poslovni Dnevnik writes, the Croatian Atlantic Group (Grupa) ended last year with record revenues, and despite the expected less favourable economic conditions, the company expects to continue this trend this year as well. They expect to be able to mark up record sales totalling around 900 million euros.
According to the company’s just published unaudited financial report, the Croatian Atlantic Group concluded 2022 with total revenues of 6.37 billion kuna, (850 million euros) which were 11.8% higher than they were back during the previous year.
Such optimism within the Croatian Atlantic Group is based on estimates that the prices of raw materials, packaging materials and energy sources should not reach record levels from back in 2022, but they still expect significant volatility. Negative pressures, on the other hand, will be alleviated by Croatia’s entry into the Eurozone and the Schengen area which took place on the very first say of 2023.
In their unaudited financial report, the Croatian Atlantic Group estimates that purchase prices, regardless of stabilisation measures back at the end of 2022, are significantly above the level from the pre-crisis period, and based on this they expect a lower normalised EBITDA margin this year. They also note that in the first half of 2022, the impact of the increase in the price of raw materials and packaging material was significantly lower compared to the second part of the year, considering that Atlantic acquired a large part of the quantities they had at more favourable prices than the then market prices. That alone would result in a drop in profitability in the first part of 2023, primarily in the first quarter. On the other hand, they expect to see the beginning of the recovery of their profit margins in 2024.
This year, as can be seen from the report, management’s focus, in addition to dealing with the problems of inflation and supply chains, will be on the internationalisation of certain brands and the development of the distribution business by strengthening existing and acquiring new principals, and on possible mergers and acquisitions.
The Croatian Atlantic Group closed the last business year with a net profit of almost 196 million kuna, at the same time, revenues grew by 11.8% on an annual basis, while profit was weaker by 43%, and according to the unaudited financial report, EBITDA was reduced by 20.6% compared to 2021, to 575.4 million kuna in total. The biggest impact on the drop in EBITDA was the high costs of raw materials, energy and logistics, the very negative impact of which exceeded sales growth across all Atlantic’s business areas.
“Despite numerous challenges, the Croatian Atlantic Group achieved historically record sales results during 2022, and growth was achieved across all business and distribution areas. After the years dominated by the coronavirus pandemic, 2022 was marked by Russian aggression against Ukraine, which caused an energy crisis, additional disruptions in supply chains and significant price increases for almost all strategic raw materials and services.
We were only able to partially compensate for these price increases by optimising our internal resources and to a lesser extent by increasing our sales prices, which, as expected, led to a drop in profitability. Regardless of this, we continued with our investments in business development – innovations in our production portfolio, the modernisation of our production capacities and the continuation of the digital transformation,” noted the President of the Management Board of the Croatian Atlantic Group, Emil Tedeschi.
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