The shares of Israel’s Eben Caesar, which is traded on Wall Street (NYSE: CSTE), plunged by 18% last night after the company missed the forecasts for the third quarter of the year and reduced the annual forecast.
In the shadow of the strengthening of the dollar, the profit per share amounted to one cent, thus the company missed the forecasts by 26 cents per share. Revenues amounted to $180.7 million, which is a 10.7% increase compared to the third quarter of last year, but below forecasts by $2.15 million.
The net loss attributable to shareholders in the third quarter was approximately $0.5 million, compared to a net profit of approximately $5.9 million in the corresponding quarter last year. The net loss per share in the third quarter was about $0.02 compared to a net profit per share of about $0.17 in the corresponding quarter last year. The company will not distribute a dividend due to the loss registered to the shareholders.
The company lowered the revenue expectations for 2022 in the range of 695-705 million dollars, this compared to the previous range of 710-725 million dollars, with the decrease mainly attributed to the effect of currency exchange rates. In addition, the company updates that the adjusted EBITDA in relation to revenues is expected to be in the range of 7.5%-8.5% for 2022, this against a previous forecast according to which the adjusted EBITDA margin will be similar to 2021 (then it was 10.6%). The change is mainly due to changes in currency exchange rates and to a lesser extent also an increase in shipping prices and costs related to logistics.
Yuval Magid, CEO of Caesar’s Stone: “The third quarter results of Caesar’s Stone reflect further progress in line with the company’s growth strategy and its transformation into a leading multi-material premium flooring company. This is the seventh quarter in a row in which we present a double-digit increase in revenues based on constant currency rates, a figure that leads the company to register another record in its revenues. We are successfully implementing a course of price increases that helps us reduce the effect of the rising prices of raw materials and deliveries, and we intend to carry out additional actions in the coming months. Alongside this, we continue to enjoy the successful implementation of the acquisitions we have made, together with the expansion of our innovative digital platforms. And while the implementation of our strategy continues to be effective, the changes in currency rates as a result of the strengthening of the dollar had a negative impact on revenues and profitability in the third quarter.
“The price increases we made more than offset the decrease in the quantity sold which is mainly attributed to the challenging macro environment in the US which affects the renovation and new construction activity. In the meantime, we have updated the forecast for the entire year 2022 to reflect the effect of the aforementioned changes in currency exchange rates that are expected to continue until the end of the year as well as the effect of increases in shipping costs and additional logistics costs. I am proud of the efforts of our team, which was able to implement the growth strategy, even in these complex times, and I am sure that Ibn Caesar has the right plan and the ability to generate added value in the industry in which we operate by leveraging the strong Ibn Caesar brand, our product offering and the marketing initiatives we are taking” , said Fish.