- SECOND QUARTER EARNINGS DEVELOPMENT - CONTINUED UNFAVORABLE CONDITIONS IN LARGE PARTS OF THE GROUP, LOW NET DEBT MAINTAINED
- INSURANCE SOLUTION FOR THE PENSION LIABILITY IN IFG IN PLACE - RISK ELIMINATION AND SIGNIFICANT POSITIVE EFFECT ON CASH FLOWFROM OPERATIONS
- THE DEVELOPMENT IN THE FRENCH SUBSIDIARY GRIFFINE SA - DIVESTMENT PLANNED RESULTING IN A NOTABLE PROFIT INCREASE
- THE FUTURE -AMPLE ROOM WITH A FOCUS ON LONG-TERM VALUE GROWTH
SECOND QUARTER EARNINGS DEVELOPMENT - CONTINUED UNFAVORABLE CONDITIONS IN LARGE PARTS OF THE GROUP, LOW NET DEBT MAINTAINED
Quarter two has developed in line with the first quarter of the financial year so far. The fiber units continue to be affected by abnormally high costs for input materials and energy, which have not yet been passed on to the customers to a sufficient extent. It is also clear that the customers to a large extent strived to reduce their own stock levels and have therefore been particularly restrained with their ongoing purchases. However, these negative factors, which strongly negatively affected our overall profitability, are deemed to have a relatively short-term effect, and we have recently seen some signs of a gradual improvement in order intake in the fiber business. However, the uncertainty and high-cost situations are estimated to characterize large parts of the group's operations throughout the fiscal year.
The weak profit development is attributable to the fiber-based companies IFG, Cresco and Drake as well as the
The probability of recovery of the outstanding debt of a customer of Drake Extrusion in the
Net debt remains low, mainly due to lower capital tied up in the capital-intensive fiber operations and the
INSURANCE SOLUTION FOR THE PENSION LIABILITY IN IFG - RISK ELIMINATION AND SIGNIFICANT POSITIVE EFFECT ON CASH FLOW FROM OPERATIONS
Today we can announce that the subsidiary
The "Buy in" insurance and the subsequent "Buy out" transfer means that IFG no longer needs to contribute funds to the CPF, as all costs are paid from the foundation's surplus. For IFG, this means approximately
After the final buyout, the CPF will be liquidated, and a surplus may arise at this point. If this is the case, part of this may be payable to IFG.
The solution with an annuity insurance also means that the risks that were associated with the role as CPF's "sponsor" are now eliminated once and for all. This also creates improved opportunities for the group to, for example, participate in structural transactions in the affected businesses.
THE DEVELOPMENT IN THE FRENCH SUBSIDIARY GRIFFINE SA -DIVESTMENT PLANNED RESULTING IN A NOTABLE PROFIT INCREASE
Griffine was separated from the group's cash pool system at the end of the previous financial year and the outstanding debt was converted into a shareholder loan. Since then, Griffine has not received any financial support from the parent company despite the continued negative results and we can state that it worked better than previously feared. Duroc's ambition is to constructively enable a sale of the business to new owners, and dialogues are currently ongoing with several stakeholders. As part of this process, Duroc has declared its willingness to contribute resources by, for example, releasing pledges, among other things, on the property in which Griffine's operations are conducted, and on inventory, in exchange for a minority ownership in the continued operations. Our assessment is that the proposals we put forward are both realistic and financially and industrially sound.
The consolidated income statement of the
THE FUTURE - AMPLE ROOM WITH A FOCUS ON LONG-TERM VALUE GROWTH
Despite the setbacks we have experienced in 2021-2022, the
Other parts of Duroc consist of capital-intensive and cyclically sensitive operations which do not currently deliver acceptable results, but whose long-term earning capacity is still considered good, among other things as a result of the investments in improved product mix initiated by Duroc in recent years.
Our good financial strength gives us great freedom to take the measures we deem appropriate to maximize the long-term value growth for our shareholders.
This disclosure contains information that DUROC is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on
John Häger
Chief Executive Officer
+46-702 48 72 99
john.hager@durocgroup.com
https://news.cision.com/duroc/r/update-from-duroc,c3685513
https://mb.cision.com/Main/998/3685513/1740548.pdf
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