A word from our CFO
From an economic perspective, 2023 was a challenging year in many aspects. Many customers entered the year with high inventory levels. High inflation and the subsequent rapid increase in interest rates further suppressed economic growth, impacting demand for products across multiple markets. Despite these conditions, CellMark demonstrated remarkable resilience and focus, establishing ourselves as a stable and reliable partner to our suppliers and customers.
As a result, we achieved a 5.5 percent increase in sales volume compared to the previous year, with a historical high of nearly 7.7 million tons. The decreased demand and lower prices are reflected in the reduction of our operating revenue from 4 251 million USD in 2022 to 3 608 million USD in 2023 and a decrease in the cost of goods sold from 3 940 million USD in 2022 to 3 346 million USD in 2023.
Despite inflationary pressure, our operating expenses have remained primarily consistent with previous years. The increases in interest rates led to interest expenses increasing 85 percent to 36 million USD. However, this expense was partially mitigated by a yearover- year increase in interest income of 8 million USD.
We closed the year with a very healthy cash flow statement. Positive operating profits contributed to a strong cash flow position, but a significant reduction in working capital also occurred. Price reductions, higher interest rates, and easier access to material reduced inventory. Price decreases and lower demand also brought the accounts receivable balances in line with historical results.
We continue to work on our operational efficiency. Some of the key activities during the year include:
- New Business Intelligence Tool: In our continuing effort to enhance decision-making and operational efficiency, we have implemented a state-of-the-art Business Intelligence (BI) tool. This system
integrates data globally from all our operating systems and provides real-time access to critical data, significantly improving our service level and management capabilities. - IT Risk Management and Cybersecurity: In today’s digital age, IT risk management and cybersecurity are more crucial than ever. We have fortified our IT infrastructure and enacted robust cybersecurity measures to safeguard our data and digital assets.
- ESG Reporting Requirements: In anticipation of new Environmental, Social, and Governance (ESG) reporting standards, we have proactively started aligning our operations and reporting mechanisms. This initiative underscores our dedication to sustainable and responsible business practices, preparing CellMark to meet forthcoming regulations.
- Organizational Structure Simplification: We have streamlined our organizational structure by consolidating several legal entities in the United States, reducing complexity and enhancing operational efficiency.
In closing, I wish to express my gratitude to every member of CellMark’s dedicated staff. Their relentless
dedication and hard work have been pivotal to our success this year. To our long-standing partners, your continuous support and collaboration have been invaluable and is deeply appreciated. Thank you for your significant contributions and for being an integral part of our company’s story.
Pernilla Jordan
Chief Financial Officer