Gascogne's Board of Directors examined the financial statements for the first half of 2024. In commercial terms, the first half of 2024 results was a continuation of the second half of 2023, with no real improvement in demand. While the Wood activity recovered volumes in sawn timber, sales volumes remained stable in the Paper activity and were down more or less significantly, depending on the sites and the markets, in the Sacks and Flexible transformation activities.
Sales prices fell overall, in line with the trend in raw materials and energy prices, while gross margins were maintained. Sales therefore fell by -14.8% in the first half.
As a result, the decrease in business automatically weighed on the Group's profitability. EBITDA in the first half of 2024 fell to Euro 7.4 million compared with Euro 22.9 million in the first half of 2023, bearing in mind that profitability was particularly penalized by the regulatory shutdown, followed by the ban imposed by the control authority on restarting the oldest MAP3 paper machine (lifted after a few weeks), which led to the loss of almost 2 months' production at the paper mill.
Development of the new paper machine continues. Construction of the logistics building is well advanced, and work on the building for the new paper machine will begin in the next few weeks. The Yankee dryer, the machine's key component, was delivered to the Mimizan site.
Sales dropped by 14.8% to Euro 194.5 million in the first half, reflecting the more difficult economic environment, which weighed on demand, and the decrease in sales prices in a less pronounced inflationary context.
EBITDA was down from Euro 22.9 million to Euro 7.4 million, mainly due to the drop in EBITDA from the Paper activity as a result of the regulatory shutdown in March and a longer-than-expected restart.
Underlying operating profit dropped by Euro 15.4 million to Euro - 2.7 million, reflecting the decline in EBITDA and the rise in depreciations.
Operating profit was negative at Euro -2.4 million, compared with Euro 12.6 million in the first half of 2023.
Consolidated net profit was negative at Euro - 4.9 million.
Outlook
The 2nd half of 2024 is better oriented in terms of volumes for the Wood, Sacks and Flexible Activities. The Paper Activity's performance will be determined by the paper mill's capacity to maintain a good level of production. In operational terms, the Group is also making the necessary adjustments to the drop in business, as it has done up to now, while stepping up its commercial prospections in all of its Activities.
The Group is also pursuing its R&D and new product development efforts, with production facilities more available for industrial trials. Demand from markets and customers remains very strong for alternatives to petro-sourced materials, reflecting recognition of the Group's know-how in its ability to adapt to the changes in the markets.
A major player in the French wood industry, the Gascogne group is present at all stages of the forets resources development.
