* Pegas says margins pressured in Q3 from polymer prices
* Pegas would not comment on outlook due to volatile market
* CEO confident firm will use all output capacity in 2009
By Jan Korselt
PRAGUE, Sept 26 (Reuters) - Czech artificial fabrics maker
Pegas Nonwovens <> has seen its margins under pressure
in the third quarter due to a previous rise in raw material
prices, Chief Executive Milos Bogdan said on Friday.
Bogdan told Reuters in a telephone interview that the firm
could see a recovery in the fourth quarter, when it will be able
to pass on higher prices of polymers to customers.
He said the firm would not give any full-year 2008 earnings
forecast due to market volatility and the strong Czech currency.
"We have a certain delay in transferring input price
(increases). That means, if we saw an upturn in the first half,
it will certainly have a negative impact," Bogdan said.
"Conversely, if the latest correction in oil prices shows in
prices of polymers -- and I must say that we are already
beginning to observe a certain influence -- it could show in the
fourth quarter in a positive way," he added.
Weak demand for technical materials, especially in
construction, will burden Pegas's results in the second half,
causing a temporary rise in stockpiles, Bogdan said.
This prompted the company to switch further to the more
profitable hygiene segment, which already creates almost 90
percent of revenue.
"Concerning 2009 ... we are quite confident that we could
again use all the product lines in full, and return stockpiles
back to normal," Bogdan said.
Pegas, Europe's second-biggest producer of spun-melt,
nonwoven textiles which are used for products such as diapers,
said in August it would not confirm its full-year outlook for 5
to 9 percent growth in earnings before interest, tax,
depreciation and amortisation (EBITDA).
It reported a 1 percent year-on-year EBITDA drop and a 7
percentage point fall in EBITDA margin, to 27.5 percent, in the
first half. Sales rose 24 percent to 75.3 million euros.
The company, whose biggest clients include Procter and
Gamble <PG.N>, has seen its shares plunge 54 percent since the
start of the year, lagging the Prague exchange's main <>
index which dropped 30 percent.
The stock traded 1.5 percent lower after Bogdan's comments
and 2.9 percent down on the day at 335 crowns at 1240 GMT on
Friday, five times this year's forecast earnings, compared with
a multiple of 13.5 at its biggest competitor, Fiberweb <FWEB.L>.
(Editing by Quentin Bryar)
