The shares of Gaesti-based refrigerating home appliances producer Arctic on Tuesday hit another historical low of 880 lei per share, although theoretically the decreasing tendency of the benchmark price should have stopped at the level of 1,500 lei per share.
Since last year, when the absolute peak of 6,150 lei per share was registered, the market suffered powerful pressure exerted by Arctic shares offer, which generated a decrease of over 85%, down to 880 lei per share.
"The general tendency on the stock market is following a downward evolution, but Arctic shares are by far the leaders of this trend. The problems Arctic is facing are similar to those the whole market confronts with, which are basically economical. The company registered important losses over the first three months of the year and there are no signs indicating recovery. Moreover, the small investment funds that owned insignificant stock in the company recently liquidated their stakes," Capital Securities operations manager Claudiu Simulescu told Ziarul Financiar.
After the first quarter of this year, Arctic registered losses worth 3.8 billion lei, against turnover amounting to 169.4 billion lei. Company's profitableness registered significant recoil as compared to the same period of last year.
Over the first three months of last year, Arctic registered net profit amounting to 15.1 billion lei, against turnover worth 120.3 billion lei.
The main reason for these poor results, situated bellow the worst expectations is, according to capital market sources, operating revenues obtained after the first quarter, which amounted to 4.7 billion lei, five times lower than those posted last year. This evolution was based on increased operating and material expenditures.
Moreover, capital market sources say that transactions concluded with Arctic shares have not outrun, over the past weeks, the average of 2,000-3,000 shares. This situation disfavours buyers and sellers who use the services of a custodian bank for market operations.
"Both buyers and sellers pay a fixed tax to the custodian bank for its services, therefore, from this point of view, it makes no difference if they buy 1,000 shares or one million shares. Diminished liquidity of Arctic shares fails to stimulate investors, so their price is very likely to keep going down for a while, until an important stake is put up for sale," Simulescu added.
For 1999, the company obtained net profit amounting to 14.07 billion lei, against turnover worth 650.7 billion lei. During this period of time, Arctic registered total revenues of 828.2 billion lei against gross profit amounting to 22.5 billion lei.
For this year, company's managers expect sales revenues worth 53.442 million dollars and gross profit amounting to 3.214 million dollars.
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