The beginning of 2018 has been operatively very similar to the previous quarters and the previous year in general. Group’s revenue for Q1 is € 30,1 million and operating profit € 5,0 million.
Demand for all the products has continued to be robust and margins have been as expected. The profitability of Q1 at EBITDA-level is 20 % which is largely in line to the previous quarters and year. The minor changes in EBITDA percentage is mainly due to normal seasonal cyclicality both in sales mix and generally in operations.
Crude oil price has continued to trend upwards. The dynamics of crude oil price affects both raw material prices and also a relevant portion of end products price, providing a base for a steady margin. Forchem has been able to manage these cycles with a satisfactory stability and the increase in crude oil price has not significantly depressed the refining margin. Forchem believes that it will be capable to maintain that performance also in the future. However, CTO market has tightened and if crude oil price stays at the current level or even rises, it might put some pressure on Forchem’s margin in the future, if product prices stay soft and the prices do not correlate sufficiently to the trend of crude oil.
Forchem is active in developing the business by means of new innovations and products. One example of this work is Progres® animal feed innovation which is an outcome of the years of research made by Forchem together with the animal feed supplier Hankkija Ltd. Several clinical animal trials have showed that the patented product can improve animal well-being and it has a potential to replace antibiotics in animal feed. The innovation was rewarded by Chemical Industry Federation of Finland’s Innovation Award in April 2018 and the commercialization of the product as well as further development continue together with Hankkija Ltd.
This release is a summary of Forchem Oyj’s bondholder report concerning Q1/2018. The report is based on the terms and the conditions of the bond. The whole report including the tables is attached to this release and it is available at www.forchem.com/investor_area.
For more information:
Henrik Lindegrén, CFO, p. +358 44 032 1075, firstname.lastname@example.org