Significant market uncertainty and sharply increased interest rates had a negative impact on demand in most of our core business segments. It is due to these continued unfavorable market conditions, all divisions saw decreases in volume and revenue.
Revenue in Division EMEIA decreased by 6%, mainly in Building & Construction, while revenue in the Packaging and Coatings & Sealants segments were slightly favorable versus the same period last year. The revenue decrease experienced by Division Asia was 32% in USD. This was partly due to a relatively low market demand in our primary segments in South East Asia. In addition, the lower growth seen in the Chinese economy had a negative impact on the region and our exports to China. Division Americas saw a revenue decrease in USD of 19%. This was mainly due to lower market demand in Building & Construction.
The direct contribution margin for the Group was EUR 24.2 million, a decrease of EUR 2.6 million compared to the same period last year. Due to effective margin management across all regions, the margin as a percentage of revenue increased to 46%, versus 43% the same period last year. The net revaluation of inventories (- EUR 0.6 million) unfavorably impacted the margin by 1%.
Operating expenses were EUR 20.9 million, down by EUR 0.5 million (2%) compared to the same period previous year. Strict cost control, a lower number of FTEs, lower energy and consulting costs as well as favorable exchange rate differences contributed to this. Depreciation costs went up due to the commissioning of parts of a new production line in Apeldoorn. The new line is expected to be in full operation during the second half of this financial year.
The operating result was EUR 3.2 million compared to EUR 5.3 million the same period last year. The net result was EUR 2.2 million (EUR 2.61 per share) versus EUR 4.1 million the same period previous year (EUR 4.75 per share).
Net cash flow amounted to EUR 1.2 million (negative), whilst for the same period last year the net cashflow amounted to EUR 4.9 million (negative). Compared to the same period last year, working capital improved by EUR 2.6 million, mainly because of strict inventory management, and income taxes paid were lower by EUR 1.3 million. Overall, this resulted in an improved cash flow from operating activities (EUR 2.8 million increase), despite a decrease in operating result of EUR 1.2 million compared to the same period last year.
Cash flow from investment activities remained unchanged compared to the same period last year due to the assembling of the new production line in Apeldoorn. Cash outflow from financing activities decreased due to the lower dividend that has been paid.
Our market position is focused on structural healthy business segments. We have a strong relationship with our customers, based on personal service and co-designing customized solutions.
We are finalizing the preparation of various strategic initiatives which will have a positive impact on the sustainable growth of our core business. It is our plan to implement organizational changes in the second half of the financial year. These changes will not only support an effective implementation of the strategic initiatives but also result in a reduction of operating expenses.
We believe that most of the destocking measures we saw previously in our markets have now come to an end. However, continued global economic uncertainty will most likely continue to impact our markets in the short term. In line with previous years, Holland Colours refrains from making financial forward-looking statements.
Apeldoorn, October 25th, 2023
Board of Management
Coen Vinke (CEO)
Eelco van Hamersveld (CTO)
Geert Rutgers (CFO ad interim)