Uponor’s result clearly better than expected – Estimates that inflation will weaken profitability this year

Uponorin The comparable operating result for the first half of the year was EUR 47.6 million, while the consensus of five analysts collected by Vara Research expected Uponor’s comparable operating profit to improve to EUR 33.5 million. The forecasts are in the range of EUR 32-36.6 million. In the comparison period, operating profit amounted to EUR 29.5 million.

Net sales were also better than expected. In January-March, net sales amounted to EUR 309 million. Analysts expected net sales to improve to EUR 289 million from EUR 277 million in the comparison period. The lowest forecast is at EUR 286 million and the highest at EUR 294 million.

“As 16.4. we noted demand in our main markets in Europe and North America has been strong. In particular, activity in the housing market and demand for building services were high in the first quarter, and we expect the positive development to continue. The outlook for 2021 still contains uncertainties regarding the next stages of the COVID-19 pandemic and the pace of economic recovery in our markets, but the year has started well and I believe that our comparable operating profit will reach last year’s level, ” Jyri Luomakoski notes in the release.

The company maintains its outlook. In March, Uponor raised its revenue guidelines for the current year. The company expects its net sales to increase from 2020, when the effect of exchange rates is not taken into account. According to a previous estimate, turnover would have remained unchanged. The company further clarifies that the term “rising” refers to an increase of at least 2.5 percent.

Uponor expects its comparable operating profit to decline from 2020, but the comparable operating margin to remain above 10%.

According to Luomakoski, inflation has been reflected in the company’s operations. Uponor aims to respond to increased raw material costs through price increases.

“The aftermath of the February winter storms in Texas, combined with increased global demand for polymers, has led to bottlenecks in the supply of some polymers. These bottlenecks can affect our ability to procure the quantities of raw materials we desire, limit our production and thereby cause delays in our services. Recent imbalances between supply and demand have raised price levels, which is already visible in some of our markets. Although we are trying to balance their effects with price increases, we expect the increase in acquisition and manufacturing costs to affect our profitability later this year, ”says Luomakoski.

Just before the announcement of the results, the company announced that it would update the savings targets and schedule of the operation excellence program.

“We have decided to extend the program until the end of the first half of 2022 to achieve total annual savings of € 25 million. We expect to achieve the initial annual savings of EUR 20 million as planned by the end of this year. ”

Source: Arvopaperi by www.arvopaperi.fi.

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