Electroaparataj Bucharest, the main Romanian manufacturer of low voltage industrial equipment, has reported net profits of 0.49 million euros for last year, down 47.8 % since 2003.
Sales were slightly higher than in the previous year, increasing by 2.3% to 14.4 million euros.
Electroaparataj's results are weaker than budgeted, with the company initially forecasting net profits of more than 1 million euros and a 15 million euro turnover.
"The failure to achieve the sales target was due to the launch of the Dacia Logan model four months later than we expected. About 20% of Electroaparataj's turnover comes from sales to Dacia and 80% of these are actually sales for the Logan. Moreover, when we put the 2004 budget together, we had no idea that the Dacia Berlina and Break models were going to be phased out," said Ovidiu Petre, Electroaparataj's chief financial officer.
The decline in profits was caused by the strong appreciation of the ROL against the euro in the final months of the year. Around 30% of the company's turnover comes from exports, meaning it received less value in ROL due to the ROL appreciation. "Electroaparataj also had 1 million euros in deposits and was again affected by the ROL appreciation," added Petre. For its exports, Electroparataj has been focusing on the European Union market.
Electroaparataj will soon merge with two other companies from the electrical equipment industry - Aparataj Electric and Electrotehnica - and with an investment vehicle, Romarta 2000 SRL, all of which are controlled by Broadhurst investment fund.
Romarta 2000 is owned by Electroaparataj and controls the majority stake in Electrotehnica. Aparataj Electric was acquired by Electroaparataj from SIF Oltenia last year. "At present, we are working on strategies to maximise the effects of the merger. I have no accurate data as to when the process will come to an end," explained Petre. catalin.ciocan@zf.ro
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