Luxten Lighting, one of the few companies in Romania to operate with an annual profit margin of over 20%, posted net profit worth 0.7 million-euro last year; more than 32 times lower than the profit registered in 2005, according to data recently published in the Official Gazette.
The figure is much lower than company officials expected, who had anticipated a gross profit of 22.3 million euros for 2006.
"The only thing that hurt our business last year was the impact of exchange rate differences. All our receivables are denominated in foreign currency and when collecting them, financial revenues declined due to the appreciation of the RON," stated Monica Bucur, the financial manager of the company.
Regarding last year's turnover posted by the company, it remained in line with the initial estimates and amounted to 92.7 million euros, down 11% on 2005.
The company operates on the Romanian market via four units: the AEM Timisoara gauge manufacturing unit, the lighting product division (Luxten Bucharest), the public lighting unit (PLD) and the electricity supply unit.
The company posted revenues worth 53 million euros in the first half, an increase of 10% on the same time last year, and a similar increase in net profit, to 6.15 million euros.
"We hope we will post a 7 or 8 million euro profit at the end of this year. Again, it will be very much up to the trend of the domestic currency, taking into consideration that receivables are evaluated at the end of the year," Bucur added. The company estimates 20% higher revenues this year against 2006.
This year's budget stands at 7.4 million euros, with the majority of funds allocated to upgrades in production facilities. The company made more than 5.5 million euros in investments in the first six months of 2007. A significant part of its revenues comes from the contracts signed with city halls to provide public lighting in some of the biggest cities in Romania. The company has a contract in place with the Bucharest municipality until 2012, which is worth approximately 9 million euros a year.
The other cities with which Luxten holds similar contracts are Constanta, Timisoara, Craiova and Ploiesti.
A future plan of the company is to float some of its shares on the Bucharest Stock Exchange by 2008.
The group was founded in 1993 by Zoltan Boszormeny, a Romanian-born Canadian investor who bought the Electrofar Bucuresti light bulb factory from the Romanian state.
The managers took control of the company in late 2003, when Zoltan Boszormeny and investment funds AIG New Europe and Societe Generale Romania exited the business. According to data from the National Trade Registry Office, the company is now controlled by several individuals, who include Claudiu Niculae Radulescu - 50.31%, Ionel Pepenica - 24.15% Olimpia Moica - 21.19% and other shareholders, who together own 4.33%.
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