Page 17 - Hoftex Annual Report 2018 EN
P. 17

With a gross profit of EUR 91.0 million, the Hoftex Group slightly underperformed compared to the pre- vious year’s value of EUR 91.9 million; this is a decline of 1 % and is attributable to the drop in over- all performance. The reduction in finished and unfinished goods was EUR -0.5 million in the year under review compared to EUR -1.6 million in 2017. However, the gross profit margin increased from 51 % in 2017 to 52 % in 2018. This development was positively influenced by the reduction in the cost of materials ratio from 51 % in the previous year to 50 % in 2018. We benefited from lower procure- ment prices in international commodities markets and efficiency gains in production. Beyond this, other operating income increased from EUR 3.3 million in 2017 to EUR 4.6 million in the 2018 repor- ting year. The one-time effect of the sale of our share in Supreme Nonwoven Industries Pvt. Ltd. in the amount of EUR 1.7 million had a positive impact on income. The fiscal year from 1 April 2017 to 31 March 2018 marked the last time that a result was recorded as part of the at-equity valuation of our interest in Supreme Nonwoven Industries Pvt. Ltd. totalling EUR 0.7 million.
The cost-reduction programmes carried out in the various divisions over the past several years and stable production capacity utilisation in the individual locations had a positive effect on the cost side: Both personnel expenses and other operating expenses decreased slightly. Based on the overall results for the year, depreciation, amortisation and write-downs were just below the previous year’s levels at EUR 10.5 million (prior year: EUR 10.6 million) and solely include scheduled depreciation and amortisation of tangible and intangible assets.
Overall, this resulted in consolidated net income for the year of EUR 8.0 million (prior year: 6.8 million and EBITDA of EUR 20.8 million, which was just slightly higher than the previous year’s figure of EUR 20.4 million. This constitutes a 2.0 % growth in earnings. Although it was not possible to fully achieve the projected growth for 2018, the defined earnings targets were met.
With a balance-sheet equity ratio of 54.5 % as of 31 December 2018, the bonded loan (Schuldschein- darlehen) with a total volume of EUR 50.0 million and the working capital line of credit totalling EUR 14.0 million, the Group has a robust corporate financing structure. This gives the Hoftex Group the flexibility and the financial latitude to finance organic growth in the future along with additional, extensive investments so that it can push ahead with its international growth strategy.
The bonded loans commenced in 2016 with a term of three to seven years are variable/fixed-rate loans. This enables the Hoftex Group to ensure a stable corporate financing structure over the medium term.
Cash inflows from operating activities of EUR 18.4 million rose by EUR 2.1 million over the previous year, above all as a result of the consolidated net income for the year of EUR 8.0 million and the positive effect of the change in working capital and the lower income tax payments due to fewer back payments. This allowed the Group to finance the investments in fixed assets from cash flows from operating activities.
Cash flows from investing activities in 2018 were EUR 4.5 million (prior year: EUR -17.9 million). Payments for the sale of shares in Supreme Nonwoven Industries Pvt. Ltd. amounting to EUR 10.1 mil- lion were a major driver of this increase. However, the full repayment of the short-term working capital loans granted to ERWO Holding AG on balance of EUR 9.0 million also impacted cashflows. The payments primarily resulted from the acquisition of Italian nonwoven manufacturer Resintex Industriale S.r.l. amounting to EUR 3.3 million and the investments in intangible assets and in tangible assets totalling EUR 12.4 million.
Financial position
Letter to Shareholders Supervisory Board Report Group Management Report Consolidated Financial Statements Annexes
  Thanks to the Hoftex Group’s comfortable financial situation, net interest income improved from EUR -2.1 million to EUR -1.8 million.
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