SBA Home sees a spike in energy costs

SBA Home sees a spike in energy costs

The first half of the year has not seen any reduction in the challenges faced by the furniture industry, but we are facing a spike in energy costs due to the continuing fluctuations in raw material prices and supply chain disruptions. As a result of the war, we have quickly redirected the supply of essential raw materials, replacing Ukraine, Russia, and Belarus with partners in Poland, Latvia, and other Western European countries. Egidijus Valentinavi ius, SBA Vice President, said these challenges will have an impact on the financial performance of the business and result in additional expenses for the business.

He said that increased production and rising prices of raw materials resulted in a one-fifth increase in half-year sales. It could have been faster if the plant in Belarus had been suspended due to the war in Ukraine.

In the first half of the year, SBA Home's factories sold one-fifth more than in the same period last year. In the second quarter of this year, the company's revenue increased by one-third to 29 million, according to Klaip dos Baldai. The merger of the Klaip da region's Laminn furniture blanks plant with Inno Line resulted in sales of EUR 28 million, double the same period last year. Visagino Linija's revenue from furniture sales was a quarter higher than EUR 24 million. A quarter more products were sold for EUR 15 million by ilut s Baldai. Since March, mebelain in Belarus has been suspended and inactive. In the first half of the year, SBA's upholstered furniture producer Kauno Baldai increased its sales by a tenth to almost 15 million.

The financial results for the second half of the year will be determined by the hottest current factors: geopolitical tensions, energy and raw material prices and high inflation, which has a negative impact on consumption, according to Mr Valentinavi ius. Europe is facing its most challenging cold season due to record energy prices and possible resource shortages, which will affect not only the industrial sector but also ordinary consumers. SBA's energy bills were almost double that of a year ago and three times higher than two years ago in the first half of the year. There are no clear positive signals and no favourable long-term trends in the commodities market.

We do not see any basis for business optimism, at least in the short term. Production volumes may be affected by the anticipated decline in demand due to unfavourable conditions. We are managing the challenges by finding alternative solutions, introducing efficiency improvements and energy-saving measures. The SBA vice president said that more substantial and focused state support would help the country's economy and business to weather this period and preserve competitiveness and jobs.