Chemical fertiliser producer Azomures Targu Mures has ended the first three months of the year on losses despite managing to boost sales by 30 percent in euros. By contrast, the first three months of last year saw the company turn a profit.
The plant lost 41.7 billion ROL (91.1 million euros) over the first quarter, with profits reaching 35.9 billion ROL (0.88 million euros) for the same period.
The company says the weaker results were caused by the devaluation of the dollar against the ROL with most Azomures production going to export, as well as the falling prices for fertilisers on foreign markets.
The company was also affected by the higher cost of rail transport and harbour services associated with the exports.
Azomures became the majority shareholder in harbour operator Chimpex Constanta after a takeover at the end of last year.
The company''s turnover climbed to 2,097 billion ROL (956 million euros) in the first three months, compared with 1,743 billion ROL (42 million euros) in the same period last year.
The improved turnover was achieved mainly thanks to the sale of products from stock. Production by Azomures was 12 percent down by comparison with the same period last year, although the company managed to increase chemical product deliveries for export by 10 percent, while domestic sales shrank 6.7 percent.
The financial results were not affected by the increased prices for methane gas, the main raw material used in the production of fertilisers. Gas price increases in Romania were made at the end of the second quarter.
This year the company is expecting net profits of 23.8 billion ROL (0.64 million euros at 37,000 ROL/EUR), almost 11 times lower than last year.
Azomures is currently holding talks with the government together with other chemical fertiliser producers to resolve the problem of the high methane gas prices, which are eroding profitability.
The company has a stock market capitalisation of around 40 million euros. It lost around half its market value over the last two months after prices of methane gas went up.
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