Turbomecanica Bucharest, the only jet and turbojet engine producer in South-Eastern Europe posted a net profit worth 5.08 million RON (1.43 million euros) in the first six months of the year, an 18% increase against the income made in the January-June period of 2005, but a 46.5% drop against the estimate in the budget.
The company posted turnover worth 44.06m RON (12.44m euros) in the first six months of the year, a 1% decline, while total revenues stood at 50.29m RON (14.2m euros), a 1.6% increase.
The bulk of these revenues (i.e. 98.85%) resulted from production-related activity specific to the company's line of business, reads a report sent by the company to the Stock Exchange.
Company representatives could not be contacted for further comment on these results.
Six months into the year, the company reported profit lower than the budgeted level, due to the increase in the expenditure related to its core business, which went up to 42.9m RON (12.1m euros), from the original forecast of 37.7m. RON (10.6m euros).
The company's net profit margin in the first six months stood at 11.5%.
Turbomecanica's financial plan had estimated a net profit of 9.5m RON for the first six months, with total revenues standing at 49.87m RON.
For the year as a whole, the company had forecasted a net profit worth 18m RON (5.08m euros at an exchange rate of 3.54 RON/EUR), only a 5% increase against the profit posted in 2005. The company had envisaged a turnover worth 99m RON (some 27.9m euros) for 2006.
Turbomecanica failed to attain its budgeted profit in the first quarter, when it posted a net profit worth 1.57m RON (0.44m euros), while according to the spending and revenue budget, estimated profits stood at 3.95m RON.
The profit made in the first three months of the year was eight times higher than in the same period of 2005, but at the beginning of last year the company had faced a drastic drop in profits due to the appreciation of the RON against the main foreign currencies, which in turn affected the company, as a significant part of revenue is derived from exports. Another reason for the fall in profit was the increase in tariffs for utilities.
Turbomecanica mainly works with Rolls Royce and General Electric. The American group, with which it set up a joint venture company in 2001, is actually its main customer. GE Aircraft, the aeronautic division of the American giant, buys a big part of the production of subassemblies for aircraft engines.
Up until the first part of this year, Turbomecanica's majority shareholder was the Turboact Employees Association, which owned 60.7% of the shares. The members of the association decided this year to dissolve the association and redistribute the shares to its members, among whom are Turbomecanica's president and vice-president, as well as the director and members of the company's managing team.
Turbomecanica
First half turnover stood at 44.06 RON (12.44m euros), down 1% from H1, 2005
Total revenues amounted to 50.29m RON (14.2m euros), up 1.6%
Net income reached 5.08m RON (1.43m euros), 18% higher than in the same time last year, but 46.5% lower than budgeted
Mainly works with Rolls Royce and General Electric, with the latter being its main client
Set up a joint venture with GE in 2001.
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