Caesarstone Provides Business Updates; As Part Of Its Strategic Plan That Includes Optimization Of Production Sources, Announces Closure Of Its Manufacturing Facility In Richmond Hill, Expected To Contribute Savings Of Approximately $20M Annually
Portfolio Pulse from Benzinga Newsdesk
Caesarstone Ltd. (NASDAQ:CSTE) is closing its Richmond Hill manufacturing facility as part of a strategic plan to optimize production, expecting to save $20M annually. The company will incur $45M-$55M in restructuring expenses and impairment charges in Q4 2023, with cash costs of $3M-$5M through 2024. Additionally, Caesarstone faces challenges in Australia, where a ban on engineered stone containing crystalline silica will affect its sales, as Australia represented 18% of its revenue for the first nine months of 2023.
December 13, 2023 | 1:13 pm
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Caesarstone Ltd. is expected to save $20M annually from the closure of its Richmond Hill facility, despite facing $45M-$55M in restructuring costs. The Australian ban on silica-based products poses a risk to its sales, as it accounted for a significant portion of its revenue.
The closure of the Richmond Hill facility indicates a significant restructuring effort by CSTE, which is likely to result in short-term costs but long-term savings. However, the regulatory challenges in Australia, where CSTE has a substantial market share, could negatively impact sales and investor sentiment in the short term. The combined effect of these factors is likely to put downward pressure on the stock price.
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