Greater Noida, India – Sheela, India's listed flexible foam maker, had total sales of INR8.8bn ($117.8m) in the third quarter of its 2022 financial year, up 6.7% on the same period last year.
EBITDA across the business fell by 34.0% to INR950m in the quarter.
Sheela said results across all its businesses were hit by a slowdown in discretionary spending as a result of inflationary pressures. There was a relative decline in sales of comfort foam in the third quarter of 2022 because pent up demand in 2021 made sales in that quarter very strong.
Higher raw materials prices and increased marketing costs hit margins and earnings.
Sales in the company’s Australia business were unchanged between the two years, at INR1.21bn. However, EBITDA in the division was down by 42.3% to INR150m, down from INR260m in the equivalent period in 2021.
The company's Spanish business had sales that rose 14.4% between the two quarters at INR1.144bn, up from INR1.00bn in the same period the year before.
Divisional EBITDA was down by 63.6% at INR110m, from INR180m in the 2021 quarter
The company explained that it has capacity to produce 123kT/year flexible foam at its plants in India, 10.5 kT/year in Australia at five plants, and one plant in Spain has 22kT/year capacity. Sheela estimates that it has between a quarter and a fifth of the Indian market for flexible furniture foam, and 40% of the market in Australia.