The sales of Damen Galati Shipyard will remain at the level of 70 million euros this year, but the company says they will exceed the 100m-euro threshold in 2006, thanks to its major ongoing contracts.
"In line with our estimates, output will amount to 70 million euros this year, only to surpass 100 million euros next year. This indicator, which is part of turnover, is more relevant for our operations since it includes the ships that are being built," Gelu Stan, general manager with Damen Galati Shipyard, told Ziarul Financiar.
The increase in revenues predicted for the following years will be due to the completion of some ships that are currently under construction, all contracted by foreign customers.
"At this moment, we have 56 ships under construction, all of them to be exported. The biggest orders are 6 chemical tankers and 10 container carriers for German customers, as well as 10 barges and 16 tugboats of various types," Stan said.
In the first half of the year, Damen Galati registered operating profit worth 1.5 million euros. The company''s management forecasts operating income to be worth 3.5 to 4 million euros this year, plus potential financial gains worth some 2 million euros (coming from exchange rate gaps). Thus, gross profit would reach a level comparable to last year''s.
In 2004, the Galati-based shipyard derived gross income worth 6 million euros, with output worth 71 million euros.
The main factors that negatively impacted the company''s 2005 profit were the higher prices for raw materials and the unfavourable evolution of the exchange rate.
"This year''s increase of the RON against the euro, as well as the recent price hikes for electrical power and steel are hurting us and the industry, making our products become more and more expensive and less competitive on the foreign market. At the same time, wage pressures by trade unions, expected to increase after the EU integration, will lead to new price increases. Consequently, Romanian shipyards are losing ground against strong competition coming from Far East producers, such as China, Vietnam and India," showed the general manager of Damen Galati.
Damen Galati is Romania''s biggest shipyard and the third largest industrial producer in Galati county, with the company having more than 3,000 employees. The entire production of the company is exported, with the main customers being EU countries, such as Germany, the Netherlands, Ireland, Great Britain and France. andrei.chirileasa@zf.ro
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