Fabryka Farb i Lakierów Sniezka (SKA) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was PLN 172.2 million, flat year-over-year, with EBITDA at PLN 26.6 million (+1.2% y/y) and net profit at PLN 10.8 million (+2.4% y/y); EBIT reached PLN 17.1 million (+0.8% y/y).

• Results were achieved despite a challenging macroeconomic environment, subdued consumer activity, and ongoing geopolitical instability, especially the war in Ukraine.

• Poland remains the largest market (74.6% of revenues), with sales up 3.3% y/y, while Hungary and Ukraine saw declines of 17.9% and 1.3% respectively.

• The Board recommended a dividend payout of PLN 34.7 million (PLN 2.75 per share) from 2024 profits, pending shareholder approval.

• Administrative costs rose 2.3% y/y, mainly due to higher wages.

Financial highlights

• Gross margin on sales improved to 49.5% (+1.1 p.p. y/y), and EBITDA margin reached 15.5% (+0.2 p.p. y/y); net margin was 6.3%.

• Net debt/EBITDA ratio decreased to 1.58 from 1.88 a year earlier.

• Cash and equivalents at period end were PLN 27.1 million, with negative free cash flow of PLN 28.5 million and negative cash flow from operations of PLN -14.3 million.

• Equity increased by 5.8% y/y to PLN 403.9 million, while total assets declined by 6.2% y/y to PLN 811.4 million.

• Net profit attributable to parent shareholders was PLN 10.6 million (+6.8% y/y).

Outlook and guidance

• Strategic goals for 2028 include net revenue of PLN 1.1 billion, EBITDA margin of 18%, and over 20% market share in key markets.

• Dividend policy and investment plans are to be maintained, assuming stable business conditions.

• Management does not provide forecasts due to macroeconomic uncertainty and the ongoing war in Ukraine.

• Key external risks include GDP growth, inflation, consumer sentiment, currency volatility, raw material prices, energy costs, and geopolitical tensions.