• Increase in inventories to PLN 124.7m (+PLN 33m q/q, +PLN 27m y/y)
• Trade receivables PLN 82.9m (+PLN 21m q/q, flat y/y)
• Trade payables PLN 99.5m (+PLN 39m q/q, +PLN 32m y/y)
• Net cash at PLN 25m • OCF of PLN -9.7m due to a PLN 15m q/q increase in working capital
• Capital expenditure in 1Q24 amounted to PLN 2.1m
• Employment in the Group at the end of March‘24 increased to 350 people from 336 at the end of March’23, the increase in employment was mainly in the production and production support area (+15 people)
The results are in line with preliminary results. The results came in line with our expectations due to lowerthan-expected third-party costs (PLN 7.4m, flat y/y) and employee benefits (PLN 9.5m, PLN +1.2m y/y). In addition, other operating results amounted to PLN +1m (we assumed a neutral result). We note a weaker OCF (PLN -9.7m) due to a PLN 15m q/q increase in working capital. At the same time, it is worth noting a PLN 33m q/q increase in inventories, the key question is the price of purchased material, as after the January-February rise in steel prices, March brought a price correction that intensified in April-May, thus the price of purchased material will be crucial to the potential FIFO effect. The steel price index presented by PUDS shows a clear downward trend in the prices of coldformed sections (currently the range of PLN 3390-3570/t). Given the downward trend in steel prices and the lack of a rebound in the demand situation, we expect a slight deterioration in quarter-on-quarter results in the 2Q24 outlook. (Łukasz Rudnik)
