Chocolate producer Excelent Bucharest posted Q1 net profit worth 31 billion ROL (766,000 euros), down 31% in ROL from the year-ago results. In the first quarter, the company logged 262bn ROL (6.4m euros) in turnover, down 1.43% in ROL from Q1, 2003.
The turnover decline is blamed, among others, on the 8.3% drop in production, which was worth 241 billion ROL, as compared to the 263 billion ROL in 2003.
The drop occurred although the revenues derived from sales had actually increased six times, to 21.4 billion ROL (530,000 euros) by the end of March 2004. Company officials would not comment on the results.
Excelent Bucharest is one of Romania's largest chocolate makers, ranking second on the market, with a 27% share, according to the latest estimates. The main player on the Romanian chocolate market is Kraft Foods Romania, which holds a 35% market share.
Excelent is currently merging with Kandia Timisoara, which operation could push the newly-established entity up to the leading market position. Excelent already holds 60% in Kandia and will absorb the Timisoara-based company. In other words, Kandia stockholders will get one Excelent share for every seven shares they own.
Excelent took over the Kandia brand last year, under a licence contract, and has forked out 14.5 million euros to rebuild the brand. The money was used to buy a Swiss production line and to start an aggressive promotion campaign.
The company that will be born out of the merger is expected to post 33 million euros in turnover.
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