Utenos Trikotažas Group: Demand for Textile Manufacturing Expected to Recover in Second Half of the Year
February 29 2024 - 2:45AM
UK Regulatory
Utenos Trikotažas Group: Demand for Textile Manufacturing Expected
to Recover in Second Half of the Year
Last year's sales were severely affected by the
global slowdown in demand, including the textile sector. The SBA
Textile Group Utenos Trikotažas generated revenues of EUR 22.2
million in 2023, down 35.7% year-on-year. The last quarter of the
year stood out for sales of the company's owned brand, UTENOS, with
a jump of 27.4%.
“We are witnessing demand slowly returning to the manufacturing
market, but due to the specific nature of the textile sector, it
will take more time before any positive shift in financial flows.
Inflation, rising interest rates, and geopolitical concerns have
led to a sharp contraction in consumption. Many even very strong
brands recorded declining sales, with some being forced to close
their operations," says Nomeda Kaučikienė, Head of Utenos
Trikotažas.
Operating costs reduced by a fifth –
capacity remains as usual
In a period of slower sales, Utenos Trikotažas
has focused on increasing production efficiency and optimizing
operating costs. The decisions implemented have resulted in a
reduction of fixed costs by fifth, while the company is capable of
producing the same amount as in 2022.
According to Ms Kaučikienė, the slowdown in
production has enabled the company to continue its strategic
transformation, the solutions of which will contribute to the
future of the company when demand returns. "Over the past year, we
have implemented a number of strategic changes that would have
taken 2-3 years to implement under normal conditions. We have
significantly reduced production time, streamlined operational
management systems, while externally we have strengthened our
positioning as a developer and producer of high-quality woolen and
organic materials," says N. Kaučikienė.
Stabilization of the UTENOS Brand
Utenos Trikotažas is currently developing its
owned apparel brand – UTENOS, whose products are distributed across
the company's e-shop and 6 physical retail stores. The revenue of
this sales segment grew by 27.4% in the last quarter of the year
and reached EUR 2.5 million by year-end.
"All the currently operating stores of Utenos
Trikotažas are successfully performing – the sales of the online
store are stable and the results of the physical outlets are
growing. The brand growth recorded in the last quarter shows that
the strategic decisions taken in 2022 have started to yield
positive results," says N. Kaučikienė.
The Group exported 82% of its production
The sales of the largest segment of the Utenos
Trikotažas Group, contract manufacturing, decreased by 39.2% to EUR
17.1 million last year. The German-speaking region remains the
largest export destination, where Utenos Trikotažas sold products
for over EUR 13 million. The Group's exports accounted for 82.1% of
its total revenue last year.
The search for new export markets and strategic
changes in the production portfolio started to show a positive
impact at the end of the year, with the current intensity of new
inquiries several times higher than at the beginning of last year.
"The pipeline of new inquiries leads us to expect a return to our
growth trajectory in the second half of the year. By focusing on
the production of complex, higher value-added products, we are
investing much more time in the development phase, which often
takes six months, and sometimes even longer, before actual sales
materialize," says Kaučikienė.
Sales of functional-technical clothing produced
by Šatrija, a subsidiary of Utenos Trikotažas, fell by 6.8% to EUR
2.6 million last year. The Group recorded a pre-tax loss of EUR
2.530 million, while Utenos Trikotažas, as a stand-alone business,
reduced its loss by 7.2% to EUR 2.507 million compared to 2022.
Bottom of Form
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.
Aurimas Likus
Utenos trikotazas, Finance director
- Mat.patvirtinimas_EN
- 2023 12M_Interim report_EN
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