July 31, 2024
In the first half of the year, the Utenos Trikotažas Group sold products and provided services worth EUR 7.4 million, which is 36.2% less than in the same period last year, when sales reached EUR 11.6 million. More than 80% of the production was exported to Western European countries.
"The first quarter of this year was the most challenging, having a significant impact on the half-year results. We are now operating at full capacity until at least the end of the year. At the same time, we are actively seeking new customers, expanding our search geography, and continuing to implement efficiency measures, focusing on the company's most profitable activities with the highest potential," says Nomeda Kaucikiene, Head of Utenos Trikotažas.
Compared to the first half of 2023, the sales of the largest segment of the Utenos Trikotažas Group - contract manufacturing - decreased by 41.6% to EUR 5.3 million, while the sales of its own brands decreased by 8.7% to EUR 1.08 million. The German-speaking region remains the largest export destination.
The Utenos Trikotažas Group ended the half-year with a pre-tax loss of EUR 2.3 million, compared to a loss of EUR 0.9 million last year. The EBITDA indicator of the Utenos Trikotažas Group is negative at EUR 1.6 million, while last year it was also negative at EUR 355 thousand.
In addition to Utenos Trikotažas, the Utenos Trikotažas Group of companies includes Aboutwear, Gotija, Šatrija, and Mrija (Ukraine). Sales of functional-technical clothing produced by Šatrija decreased by 25.1% in the first half of this year, amounting to EUR 1.04 million.
Prioritizing High Potential Business Areas
The pandemic, war, energy, and other price shocks, along with weakened demand, have negatively affected the textile sector worldwide over the past few years. Especially in Europe, where producers are under further pressure from cheap labor countries in Asia. A significant drop in demand and a lack of decisive action would only further deteriorate the company's financial situation. To prevent this, the company's board initiated the restructuring of the company.
The restructuring plan, already approved by the company's shareholders and covering a period of four years, contains measures aimed at ensuring solvency and continuity of operations in the long term. The aim is to reorganize the company so that even with lower sales, the company can restore profitable operations and meet obligations to employees, creditors, and partners.
"The main direction of the plan is to continue increasing efficiency by reducing costs and eliminating unprofitable activities while retaining as much viable business as possible. We are valued as producers of high-quality wool garments and advanced developers of complex technical and innovative organic materials - this is where we will focus our innovation efforts, aiming for such products to become the foundation of Utenos Trikotažas' production," stated Nomeda Kaucikiene.
About Utenos Trikotažas
Utenos Trikotažas is one of the largest and sustainable knitwear manufacturers in Central and Eastern Europe. Its specialized focus lies in on-demand ready-to-wear production and jersey fabric development for leading international brands, covering the entire production process from yarn to finished products.
Utenos Trikotažas Group operates three factories - Utenos Trikotažas (Lithuania), Šatrija (Lithuania) and OAO Mrija (Ukraine). Environmental and social responsibility commitments cover all areas of Utenos Trikotažas' production and operations - from organically farmed natural fibers, the use of chemicals in production, to fair pay for employees and absolute transparency in production processes. Utenos Trikotažas is part of the SBA group.
