Reka reports double-digit gains for cable and rubber units

Hyvinkää, Finland – Reka Industrial Plc has reported profitable growth across its two business segments – cable and rubber – for the nine months to 30 Sept.

Over the first three quarters, group turnover increased 32% year-on-year to €155.5 million, while earnings (EBITDA) came in 30% higher at €11.8 million.

Turnover increased in both the cable and rubber industries, Jukka Poutanen, managing director, Reka Industrial reported in a 20 Oct statement.

The cable segment’s turnover for the review period rose 32% year-on-year to €132.5 million with earnings were 33% higher at €10.6 million – despite raw-material cost issues.

Rubber segment sales increased 26% year-on-year to €23.1 million, while earnings at €2.1 million were 50% above the level at the same stage in 2021.

While issues around availability and rising energy prices had not affected market demand so far, Poutanen noted “a clear delay in passing on increased acquisition costs to customer prices in both industries.”

Moreover, higher procurement prices, global material shortages and logistics challenges required an increase in inventory to ensure availability and delivery-reliability to customers.

“Both industries have had procurement and delivery capacity challenges. Covid-19 and supply chain logistics have required a lot of effort to ensure material deliveries,” the MD stated.

According to Reka, its rubber segment has maintained a strong position in its selected market segments and order volumes continued to grow over the first nine months.

Among various business developments, the Finnish group noted that the rubber segment’s September turnover of € 3.0 million, was the largest in Reka Rubber's history.

The rubber unit, it added, “is currently working with customers on prototypes and pre-kits for products needed for electric commercial vehicles. Related volume deliveries will begin in 2023.”

Reka went on to note that delivery capacity at Reka’s rubber hose production operation in Dopiewo, Poland had been “weak” at the start of the year.

“Although delivery volumes have clearly increased, there have still been problems with the delivery capacity of rubber hose production,” said the interim statement.

The main focus of the Polish unit is to increase hose production capacity and to streamline the manufacturing process, according to the interim statement.

“Changes made are already visible in the delivery volumes,” reported Reka, adding that the plant had increased levels of temporary labour there to address a still challenging labour and overtime-cost situation.

With regard to the Russian invasion of Ukraine, Reka said its rubber unit has no sales to Russia, Belarus or Ukraine, or procurement from these countries.

Reka went on to report that Tero Manner had taken over the role of managing director at its Reka Rubber subsidiary, replacing Martti Aromaa, who moved to special duties until his retirement on 30 June 2023.