(Reuters) -Swiss plumbing supplies maker Geberit on Tuesday reported higher than expected operating cashflow in the first quarter, despite an 8.9% drop in revenue as a pandemic-related boom in home renovation ended and inflation rose.
The maker of piping and ceramic products for bathrooms, reported sales of 892.7 million Swiss francs ($996.65 million) for the first quarter, compared with 980 million francs the previous year.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) dropped by 2.5% to 295.6 million francs in the first quarter, compared to 303.3 million francs a year earlier.
Geberit said its forecasts for the current year have not changed significantly and reiterated its expectation for a challenging environment for the construction industry in 2023.
Record-breaking inflation and higher interest rates across Geberit’s core markets, as well as the end of the home improvement trend seen during the COVID-19 pandemic, have weighed on demand as consumers cut back discretionary spending.
A rise in sales prices and lower energy costs in part compensated for lower volumes and higher expenses, including increased personnel costs and raw material inflation.
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Jefferies analysts said the the sales trend was poor, but the near-term focus was likely to be the profit beat.
Vontobel said EBITDA had beaten market expectations by 7%.
Its share price was up 1.6% at 0718 GMT after rising around 4% just after the market opening, making it one of the best performers on the Swiss blue-chips index.
($1 = 0.8957 Swiss francs)
(Reporting by Anna Mackenzie and Amir Orusov in Gdansk; Editing by Kim Coghill, Uttaresh Venkateshwaran and Barbara Lewis)
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