Semperit sees “major challenges” ahead following record year

Vienna – Semperit Group has posted record results for the year 2021, but expects a rough year ahead as Russia-Ukraine war continues to pose multiple challenges and demand declines for rubber gloves.

Group consolidated sales increased by 27.4% year-on-year to €1.1 billion, reflecting a nearly 40% improvement in revenue from Sempermed rubber gloves unit to €626 million.

Sales in the industrial sector, which includes the Semperflex, Sempertrans, Semperform and Semperseal units, grew by 16.2% to €556.1 million during the year.

Group earnings (EBITDA) increased by 73.5% to €361.8 million while earnings margin rose significantly to 30.6% from 22.5% the year before.

Semperit said it achieved record results despite the difficult economic climate, which was affected by the ongoing Covid pandemic, rising inflation and the tense situation in the global supply chains.

The strong results, said CEO Karl Haider, will create “a solid starting point” for dealing with the expected effects of the Russian war on Ukraine as well as the related sanctions and restrictions.

According to Semperit, the year 2022 will be “characterised by major challenges”, due to the subsiding course of Covid as well as the impact of the ongoing conflict in Ukraine on materials supply and costs.

The Austrian group said it expected price levels for medical products, including rubber gloves, to “return to normal” in 2022 as the Covid impact declines.

It did not however offer a forecast in connection with the development, particularly due to the "widely varying" regional trends and their influence on the international production sites.

The results of the group will also depend heavily on the availability and prices of the raw materials and consumables as well as by the functioning supply chains.

The Austrian manufacturer, which had earlier this month warned about "significantly lower results" said it had already witnessed “to a limited extent”, direct and indirect negative influences of the Russia-Ukraine war on sales volume and revenue figures.

The conflict, it said, has brought about impending material bottlenecks, energy and raw material price increases, transport and supply chain problems, changes in the interest rate landscape as well as an increased risk of cyberattacks on companies.

In particular, Semperit said shortages of key raw materials and consumables for the manufacture of vulcanised rubber products could lead to production constraints in 2022.

Other key factors are the sufficient availability of containers to be used to deliver products, and the availability of skilled staff.

With respect to expenses, the group expects additional costs for raw materials and consumables, input and intermediate products, and energy and transportation expenses.

Furthermore, Semperit anticipates that the current situation to have a noticeable cost-increasing effect on wages and salaries.

The price pass-through opportunities, the group said, will depend on the price sensitivity of the respective customers and the dynamics in the segment-specific product markets.