Forterra, a leading U.K. masonry-product manufacturer, announced on Tuesday that it is anticipating a significant decline in profits and revenue for the first half of 2023. The company also highlighted increased challenges in the second half of the year.
According to Forterra’s projections, adjusted pretax profit is expected to more than halve to £18 million ($23.1 million) in the first half of the year, compared to £37.3 million in the same period of 2022. Meanwhile, revenue is expected to decrease by 18% to £183 million from £222.8 million in the previous year. In addition, earnings before interest, taxes, depreciation, and amortization (EBITDA) are forecasted to fall to around £30 million from £46.1 million.
Forterra emphasized that its selling prices have remained stable and its cost base unchanged. The company has also taken steps to rebuild its inventory, with stock levels increasing by approximately £30 million during this period. Although the reduction in customer inventory has been more prolonged than initially anticipated, Forterra expects this trend to ease in the second half of the year.
Previously, Forterra had optimistic expectations for the second half of 2023, anticipating improved market conditions and more favorable results during that time. However, the company has now revised its outlook and foresees only a modest improvement in business conditions. As a result, Forterra envisions a balanced split between the two halves of the year.