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While reports in which she presents nicely on the top line – but the numbers fail to seep into the bottom line so far. Last year the company promised mountains and hills – after no profit was observed in the second quarter reports with the IPO, the company claimed in an interview with BizPortal that it would reach the end of the year – but it did not happen, and the company recorded zero annual profit. Now the company is again showing a loss, but promises it will improve later this year. It remains only to hope that this year it will be true.
In the first quarter of 2022, the company shows a 34% jump in revenue to NIS 170 million, compared with NIS 127 million in the corresponding quarter. Gross profit has already increased much less: an increase of 14% to NIS 31.1 million, compared with NIS 27.3 million last year. EBITDA has already risen by only 6.5% to NIS 16.4 million, compared with NIS 15.4 million in the corresponding quarter.
On the other hand, operating profit fell by 32% to only NIS 3.97 million, compared with NIS 5.8 million in the corresponding quarter last year. The company also made a loss of NIS 1.34 million, compared with a profit of NIS 2.5 million in the corresponding quarter last year.
So why is there no profit in the current quarter as well? This time it’s because of the war in Ukraine
It should be remembered, Rav Briach is a real company, not a dream company that sells vague future technology, but an industrial company, one that has existed for many years and is supposed to generate profitability – but in the meantime it is not happening. As in the previous quarter, the company is now blaming the rise in raw material prices, this time because of the war in Ukraine, which is raising world steel prices, and it says it is taking action to minimize the impact of the crisis.
What will happen next? The company states that steel prices reached “peak values” in the first quarter of 2022, and that it is raising prices in all five of its sectors, “including opening existing contracts in the contractors sector and closely maintaining the expenditure structure.” At the same time, it expects “a decrease in the prices of steel contracts in view of the average price of steel in contracts that the company has entered into” – In other words, Rav Briach is actually expecting an improvement in results later this year, following both a decrease in the prices of raw materials and an increase in prices made by the company.
In the investor presentation published by Rav Briach, you can see this forecast clearly: 
Idan Zoarz, CEO of the Rav Briach Group, said in the background of the reports: “The company continues to expand its market shares in the construction products industry and implement the product basket strategy for the contractor with continued growth in its future contracting contracts in the contractors, residential and institutional sectors. We are successfully dealing with the rise in raw materials: on the one hand, the closing of steel contracts at purchase prices, which are declining until the end of 2022, and on the other hand, the continued realization of price adjustments and operational efficiency. About a week ago, we reported on the launch of Phase II of the new plant, which will be at the forefront of technology and innovation and will lead to significant efficiencies in production capacity and increased company profitability, along with building new growth engines and entering overseas markets.
Will Rab-Briach be able to show improvement in the coming quarters and show a profit in 2022?
So the potential is there. Will this time the company be able to meet its own forecasts and present a profit and not just an increase in revenue? We’ll have to wait for the next reports to find out. Rab-Briach was issued last August at a value of NIS 625 million after the money, since then it has lost 27% of its value and is traded at a value of NIS 457 million.
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Foggy stories
19/05/2022
18:23
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0Another successful IPO by Rosario and a huge loss by Altshuler
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