Perfect precision in meeting the forecasts

The LUG S.A. Capital Group met the adjusted forecasts of financial results for 2013 with perfect precision. The net profit achieved in 2013 was a positive surprise, as it was by 8 per cent higher than the forecasts.

On 13 February 2014, the LUG S.A. Capital Group published a consolidated quarterly report, which presents unaudited financial results for the fourth quarter and cumulatively for the entire 2013.

- "From the macroeconomic point of view, 2013 was one of the weakest periods of the last decade for the Polish economy. The gross domestic product decreased to the level of 1.6 per cent. Positive symptoms concerning the economy do not motivate the construction sector sufficiently, so that we could feel positive results as a lighting manufacturer" says Ryszard Wtorkowski, President of LUG S.A. Management Board.

In the fourth quarter, LUG achieved the revenue on sales in the amount of PLN 30,846.51 thousand, in comparison to PLN 31,495.27 thousand in the fourth quarter of 2012. In cumulative approach, it means PLN 102,758.49 thousand of revenue in the entire 2013. In accordance with the company's development strategy, over 55 per cent of revenue in 2013 was obtained on the foreign markets, confirming the Issuer's competitive advantage within the scope of export. In 2013, the results generated on the foreign markets improved by 13 per cent per year. Unfortunately, at the same time local sales decreased by 11 per cent per year. In total, in 2013, the dynamics of revenue on sales amounted to 0.78 per cent.

- "The level of sales on the Polish market was negatively affected by movements of investments with the estimated value of about PLN 5 million to the next year. This fact also negatively affected the operating result, because the initial works on the contracts required engagement of resources and employees, as well as launching customisation of selected lighting fixtures, which generated operating costs," explains Ryszard Wtorkowski.

The profit on operating activities in the fourth quarter amounted to PLN 802.58 thousand and was nearly by PLN 500 thousand higher than in the same period of 2012. Simultaneously, in the entire 2013, EBIT was shaped at the level of PLN 2,611.35 thousand in comparison to PLN 2,893.69 thousand in 2012. EBITDA increased in the fourth quarter and amounted to PLN 1,606.41 thousand (growth + 41.99 per cent per year). EBITDA for the entire year decreased by 6.67 per cent per year and amounted to PLN 5,757.58 thousand in 2013. Net profit in the fourth quarter of 2013 amounted to PLN 372.27 thousand and was by 5.17 per cent higher than in the fourth quarter of 2012. Regarding the entire year, after four quarters of 2013, the net profit amounted to PLN 1,511.71 thousand in comparison to PLN 3,047.92 thousand in 2012. The result was affected, among others, by exchange rate differences, which increased the net profit in 2012 by PLN 925 thousand and decreased it by PLN 125 thousand in 2013.

- "At the beginning of 2013, we had greater expectations and anticipated better results. However, because of negative trends in the construction sector and significant movements of the investments, the forecast adjustment was a difficult but necessary decision. Therefore, we met the commitment made in November within the framework of that adjustment, and we even improved the net profit by 8 per cent," explains Ryszard Wtorkowski.

The LUG S.A. Capital Group met the adjusted forecasts of financial results for 2013 with perfect precision, in accordance with the assumptions included in the adjustment. The achieved revenue on sales, EBIT and EBITDA were equal to the amounts declared in November. The net profit achieved in 2013 was a positive surprise, as it amounted to PLN 1,511.71 thousand and was by nearly 8 per cent higher than the forecasts.

Table The level of meeting the forecasts of consolidated results
of the LUG S.A. Capital Group for 2013 based on unaudited results

The LUG S.A. Capital Group is among the most dynamically developing Polish lighting companies. Last year, it took a number of activities ensuring dynamic development presently and in the future. Such activities as establishing a new subsidiary in Great Britain or participation in the international fairs, resulted in continuous increase of export revenues. In 2013 it also completed the investment processes in the company, namely development of the production hall, and launched a new line manufacturing electronic components. The beginning of 2014 was successful, as the company, among others, concluded the contract for delivery of comprehensive lighting solutions for the construction of the second subway line in Warsaw.

See the full version of the report for Q4'2013