According to the company’s financial statements for 2022, factors such as low production utilization, high fixed costs, high metal purchase costs and high energy consumption costs as well as low domestic demand for the unique container size that can to be produced, resulted in the containers manufactured by the Patras factory having a high and uncompetitive cost. Therefore, the continuation of container production at the Patras factory has become unprofitable.
It is recalled that the specific factory has two low-speed metal can production lines, capable of producing only established “standard” metal cans of 33cl capacity, with an annual production capacity of approximately 900 million cans.
Thus, according to the financial report for last year, “the General Meeting of the Company’s Shareholders of May 31, 2023 decided that the Company should proceed with the interruption of the production activity of the Patras factory, until September 30, 2023, and in the consequent final shutdown”. This decision has as an inevitable result the interruption of the operation of the factory and the lack of work for its 121 employees.
For this purpose, the company, after consultations with the Business Union, prepared a “Voluntary Exit Program”, which it describes as “particularly favorable” and notes that “it was accepted by the vast majority of employees”.
At the same time, the financial report notes that in recent years the demand for the “Acro B64” product produced by its factory in Corinth has decreased to a large extent and has been shifted to the new “ISE” tip. The ISE tip is lighter and this has an impact on the production cost of the product and consequently the selling price.
“The Corinth factory does not have the technology and machinery to produce the ISE ends, so the interruption of the production operation of the ‘B64’ is imperative due to the lack of sales orders,” the report emphasizes. In this context, the company decided to stop the operation of the Akron Department from 30.6.2023, as a result of which the 39 employees who work there no longer have a job.
For this purpose, the company, again after consultations with the Business Union, prepared a “Voluntary Exit Program”, which it characterizes this time as “particularly favorable” and notes that “it was accepted by the vast majority of employees”.
“The Company made these difficult but unavoidable decisions in order to mitigate the losses that would otherwise have occurred as a result of reduced demand for the metal containers and ends produced by the 2 plants. The reorganization costs that will result from these actions will have a significant impact on the company’s profits, but the criterion is the maintenance of the company’s financial situation and its strengthening for the future. The funds of the Balance Sheet as of 12/31/2022 include fixed assets and reserves related to these actions for a total amount of 5.33 million euros, for which the Company’s management is evaluating alternative ways of management in order to make the best possible use of them” it is also stated , in the financial statements
Revenue growth, but profitability decline in 2022
The company’s Turnover in 2022 increased by 4.8% compared to 2021 and amounted to €185.27 million compared to €176.84 million the previous year. This change comes from the increase in sales of beer & soft drinks containers by €29.9 million combined with the fact that there are no longer sales of food containers which in 2021 were €21.47 million.
It should be noted that the increases or decreases in the sales prices of beer & soft drinks containers, which are due to their connection with the fluctuations in the stock market prices of aluminum, do not affect the profitability of the company because the purchase prices of the raw material fluctuate accordingly (aluminium cost).
In this context, Gross Profits in 2022 amounted to €6.43 million, a decrease of 55.7%. The benefits of overall improved beer & soft drink can sales volumes were reversed due to very large increases in energy costs. Characteristically, the cost of electricity increased by €4.76 million in 2022.
Also, Operating Profits before Taxes, Interest & Depreciation (EBITDA) decreased by 70.9% and amounted to €2.15 million. Profits before Taxes for 2022 amounted to profits of €0.12 million against profits of €5.23 million .in 2021 knowing a reduction of 97.7%.