Audited annual report of AS VALMIERAS STIKLA ŠĶIEDRA for 2019

24. October, 2020

VALMIERA GLASS GROUP’S consolidated net sales - EUR 119.5 million

In 2019, the consolidated net sales of VALMIERAS STIKLA ŠĶIEDRA AS (hereinafter – the Company) and its subsidiaries (hereinafter – VALMIERA GLASS GROUP or the GROUP) amounted to EUR 119.5 million, demonstrating an increase of EUR 5.2 million or 4.6% compared to 2018 (y-o-y). VALMIERA STIKLA SKIEDRA AS standalone net sales in 2019 amounted to EUR 88.7 million (-2% vs 2018).

In 2019, the Company and its UK subsidiary demonstrated good operating results. Nevertheless, they could not offset the losses incurred by the US subsidiary. Ultimately, in June 2019, the GROUP’s management decided to close the loss-making glass fibre manufacturing facility of the US subsidiary, and initiated Chapter 11 proceedings in the US. Simultaneously, in order to assure business continuity and restructure the financial liabilities of the GROUP, the Company initiated legal protection proceedings (LPP) in Latvia, and the Company’s legal protection plan was approved on 18 October 2019.

The initiation of Chapter 11 and LPP proceedings substantially increased the Company’s working capital requirements, and triggered various legal and financial costs associated with the financial restructuring activities, which negatively affected the financial results of the Company and the GROUP for the year 2019.

In 2019, products manufactured by the Company, were exported to 51 country across the world, with an export share of 98%. The key sales markets of the GROUP were as follows: 68% of the total output was sold in EU countries, 21% in North America, 2% in CIS countries and 9% in other export countries (incl. Switzerland, Japan, South Korea, UAE, etc.).

Across product segments, sales volumes increased for high added-value products, such as E-glass fibre textured fabrics and construction mesh, and non-woven materials with a thermal resistance of 600+°C, as well as for the high-content SiO2 glass fibre fabrics with a thermal resistance of 1000+°C. In other product segments, sales volumes to be considered as stable or decreasing. Within the GROUP, the largest increase in turnover was observed in the raw materials and thermal insulation product segments. In 2019 the GROUP continued to reduce sales of traded goods manufactured by third party fiberglass manufacturer, and focus on internally produced high-margin products, manufacturing efficiency and overall profitability.

In 2019, the GROUP employed on average 1 515 employees, of whom 1 120 were employed by the Company. The UK subsidiary employed 134 employees and the US subsidiary employed 261 employees on average. On 17 December 2019 the Company and the Latvian Industrial Workers Trade Union signed a glass fibre industry general agreement and made a commitment to working together to deliver improvements for companies and workers in the industry.

On 23 October 2020, the Company published its separate and GROUP’s consolidated financial statements for year 2019. The separate financial statements reflect the financial position and financial performance of AS VALMIERAS STIKLA ŠĶIEDRA. The consolidated financial statements of the GROUP provide information on the consolidated financial position and financial performance of all companies of VALMIERA GLASS GROUP. The Company’s auditors KPMG Baltics AS have issued separate independent auditors’ reports for each of these financial statements.

According to the auditors’ report on the separate financial statements, the separate financial statements of the Company give a true and fair view of the financial position of the company as at 31 December 2019, and of its financial performance and cash flows for the year then ended, except for the potential effects on the financial results for year 2019 of the very conservative assumptions used to estimate the recoverable amount of the receivables from the US subsidiary as at 31 December 2018.  For more information, please see section Basis for Qualified Opinion in the Independent Auditors’ Report enclosed to the financial statements.

The Company informs that the auditors have issued a disclaimer of opinion on the GROUP's consolidated financial statements for year 2019. Due to the ongoing US subsidiary’s Chapter 11 proceedings and the planned liquidation of P-D VALMIERA GLASS USA Corp. in 2020, the management of the GROUP considered unfeasible to audit the financial statements of US Subsidiary for the year ended on 31 December 2019. As previously reported, the liquidation plan of the US subsidiary was submitted for an approval to the Bankruptcy Court of the United States on 10 September 2020. Due to the lack of audited financial statements of US subsidiary for year 2019, the auditors could not perform audit procedures to satisfy themselves regarding the financial information of US Subsidiary as at and for the year ended 31 December 2019, which is included in the consolidated financial statements of the GROUP.  Therefore, the auditors could not issue an opinion on the GROUP’s consolidated financial statements for year 2019 as a whole.

To view listed reports below - click HERE.

  • Separate and consolidated audited annual report for the year 2019;
  • Corporate governance report 2019;
  • Environmental, social and corporate governance report 2019.