LUG ended the third quarter with profit and profitability increase

15 November 2018

The LUG S.A. Capital Group, one of the leading producers of system solutions in the field of professional lighting technology, published consolidated results for the third quarter of 2018. In the reported period, the Group's revenues amounted to PLN 42.94 million and increased by 9.4 percent compared to the third quarter of 2017. This is the second quarter in the Group's history when revenues exceeded the PLN 40 million barrier. The company generated a net profit of PLN 2.44 million. Cumulatively, the net profit for the first nine months of 2018 showed an increase of 17.6 percent, to the level of 5.01 million PLN.

The LUG Group completed the third quarter of 2018 with an increase in profits faster than the increase in revenues and a further improvement in profitability. Gross profit on sales increased by 11 percent y/y, and thanks to the optimization of costs of products, goods and materials sold, gross margin on sales reached 47.1%, only 0.9 pp. less than in record in the history of the Group IV quarter of 2017.

The EBITDA and operating result increased by +4.7%, respectively. and by +54.7 percent y/y leading to an increase in margins by 2.5pp and 1.8pp, respectively, in y/y terms. The consolidated net profit amounted to PLN 2.44 million and allowed to generate a net margin at the level of 5.7 percent, by 0.3pp higher than a year before.  

- The financial results generated in the third quarter give me optimism despite the symptoms of deteriorating macroeconomic conditions. We managed to improve the profitability of the implemented projects and continue to increase margins, including thanks to economies of scale and investment in modern, automated equipment facilities. Good financial ratios also confirm that the directions of development implemented since last year bring results in the form of improved operating results and maintaining the gross margin at the level of over 47% - comments the results of Ryszard Wtorkowski, President of the Management Board of the LUG Capital Group.

For the first time in the Group's history, it was possible to achieve a gross profit exceeding PLN 20 million in one quarter. In the last four quarters, gross profit on sales amounted to PLN 70.79 million, an increase of 25.1 percent (by almost 10pp higher than the increase in revenues).

The third quarter also resulted in strengthening domestic sales in relation to exports. Revenues from projects implemented in the country in the last quarter amounted to PLN 24.77 million and accounted for 57.7% total revenues.

- This is not a constant trend. The recorded increase in domestic revenues is the effect of diversifying sources of income and the ability to use the continued good economic situation on the Polish market and shifting some of the foreign contracts to the next months. We expect that the dynamics of export revenues in the next quarters will return to current levels - adds President Wtorkowski.

Net profit in the third quarter of 2018 amounted to PLN 2.44 million and was 15.1 percent. higher than last year and as much as 70.6 percent. higher than in Q2 2018. As a result, the net margin increased by 0.3pp in y/y terms and 2.2pp in q/q terms. In the last four quarters, the total net profit for shareholders of the parent entity increased by 43.3 percent and amounted to PLN 7.84 million, more than in the whole 2017.

EBITDA amounted to PLN 4.34 million in Q3 2018, 44.7% more than last year and 24.4% more than in Q2 2018. EBITDA margin was 10.1%, or 1 , 7pp more than before the quarter and 2.5pp more than last year.  

The factory in Argentina officially opened

After several months of work, production was started at the LUG production and assembly plant in Argentina. The first foreign factory of the LUG Group produces the latest generation LED lighting fixtures, designed for lighting urban spaces, road infrastructure, schools, public buildings and industrial facilities.

- Internationalization is one of our strategic directions of development. We are still looking for new outlets. Therefore, the initiative related to the establishment of a new company LUG Turkey, which joined the LUG Capital Group. In October, we officially opened a production and assembly plant in Argentina, where production has already started. - emphasizes Ryszard Wtorkowski.

LUG showered with prizes

LUG S.A. Capital Group received many awards and prizes in the third quarter, which emphasize its development. For the fourth time, the company became the Lubuskie Business Leader in the category of "large enterprises". In the same competition, the Company was awarded with the title of Leader of Innovation. LUG also received the prestigious Economic Award of the Marshall of the Lubuskie Voivodeship and as one of 21 Polish companies it was nominated for the Economic Award of the President of the Republic of Poland. The company's operations outside the country were also noticed. The Polish Investment and Trade Agency has honored LUG with the PAIH 2018 Prize in the Foreign Expansion category.


LUG ended the third quarter with profit and profitability increase