Pegas Nonwovens Posts Fourth-Quarter Profit on Currency Swings

Pegas Nonwovens SA (PEGAS), a Czech maker of nonwoven textiles, swung to a fourth-quarter profit as currency swings boosted earnings.

Net income for the three months ended Dec. 31 was 3.2 million euros ($4.1 million) from a loss of 2.3 million euros a year earlier, the Znojmo, Czech Republic-based company said today in an e-mailed statement. Revenue rose 20 percent to 47.6 million euros.

Pegas expects 2013 Ebitda, or earnings before interest, tax, depreciation and amortization, to rise between 5 percent and 15 percent from 38.1 million euros last year, it said. Total capital expenditure for the year won’t exceed 41 million euros, it said.

“I don’t expect a strong market reaction as they met their full-year guidance,” Komercni Banka analyst Josef Nemy said by phone. “Their 2013 forecast is also pretty decent and the news that the Egyptian plant should have positive results is also good.” Nemy has a “buy” recommendation on the stock.

Pegas shares traded down 0.2 percent at 520 koruna at 9:09 a.m. in Prague, their lowest level since Feb. 26, according to data compiled by Bloomberg.

The priority for 2013 is the commissioning of the new production line in Egypt, Chief Executive Officer Frantisek Rezac said in the statement. The new plant in Egypt should have a positive Ebitda, he said.

The company expects production volume this year to rise helped by its Egyptian line. Because of the new capacity and the need to create inventories at the Egyptian plant, there should be a slight increase in the level of inventories of finished products compared with 2012. Pegas’ Egyptian plant should post a positive Ebitda this year, it said.

Production capacity should be sold out for this year, Pegas said.

To contact the reporter on this story: Lenka Ponikelska in Prague at lponikelska1@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.