Export of textiles gains momentum: contract manufacturing of Utenos Trikotažas grew by 15%
The third quarter of the year continued an upward trend in the textile export markets. Compared to the same period last year, on-demand production sales of Utenos Trikotažas, part of the SBA Group, increased by 15.1% to Eur 16.4 million.
‘Accelerating consumption, driven by the easing of pandemic restrictions has caused many apparel brands to not only relaunch, but also speed up the production of their collections. Utenos Trikotažas is currently operating at full capacity, with orders already lined up until July next year. If last year’s slowdown made us take every chance to fill the production gaps, we are now returning to the strategy of focusing on higher added value and more expensive production only’CEO of Utenos Trikotažas Petras Jašinskas
Effect of energy, raw materials and labour costs on profitability
Over the nine months of this year, sales of Utenos Trikotažas stood at Eur 19.9 million, i.e. 8.4% more than last year. The share of the company’s income from export sales amounted to 81.3% of the total revenue. The company ended the third quarter with a loss of Eur 1.3 million before taxes, compared to a loss of EUR 257 thousand a year ago. This year, EBITDA was Eur -783 thousand, compared to Eur 331 thousand in 2020.
‘Along with other industrial sectors, we are challenged by the effect of the cost of raw materials, labour and now energy costs on our performance. Seeing that we plan production months and sometimes even quarters forward, we have had limited ability to react to as these costs fluctuate. At present, we pay special attention to the price fluctuation risks, by adjusting production pricing, identifying the sensitivity of each production order to price changes and cooperating closely with both suppliers and customers who are not always willing to adjust agreements as business circumstances change’P. Jašinskas
According to Mr Jašinskas, the next strategic step is to rebalance the assortment of both fabrics and production Utenos Trikotažas is offering to the market, focusing exclusively on innovative complex products of higher added value, replacing the production of traditional textile articles.
Investments in the expansion of UTENOS outlet network
During the first three quarters of 2021, sales of the apparel brands managed by Utenos Trikotažas – UTENOS ir ABOUT – reached Eur 3.3 million, representing a decrease of 19.9% compared to 2020, when the sales of face masks contributed significantly to the figures.
Optimistic future forecasts have encouraged Utenos Trikotažas to continue expanding its network of physical stores: during the third quarter alone, the company opened 3 new UTENOS brand stores. Currently, there are 25 Utenos Trikotažas stores, of which 24 are in Lithuania and one in neighbouring Latvia. The majority of these stores are in shopping centres and managed under franchise.
Besides Utenos Trikotažas, Utenos Trikotažas Group includes companies Aboutwear, Gotija, Šatrija, and Mrija (Ukraine). During the first nine months of 2021, the Group sold products and provided services worth Eur 21.3 million, i.e. 2.2% more than a year ago, when the group’s sales amounted to Eur 20.9 million, with 82.3% of the group’s products being exported. The Group incurred a loss of Eur 1.8 million before taxes in that period, compared the Group’s losses of Eur 446 thousand before taxes in 2020.