Altex, the biggest retailer of electronics and electrical home appliances in Romania, estimates it will reach an income worth 6m euros by yearend, after it posted 3.9m-euro in losses last year.
At the same time, the retailer has revised this year's forecast for turnover growth from 275m euros to 300m euros.
"The first half of the year led to decreases in stocks due to a more rapid turnover. A 40% increase in revenues, to 300m euros, is expected to boost stocks by up to 10%, lead to an estimated net income of 2% and to an EBITDA worth 15m euros," stated Dan Ostahie, CEO of Altex.
Last year's 3.9m-euro losses were primarily due to provisions set up for stocks established after the audit was completed, explained Altex representatives. "Stocks set up last year reached 75m euros, and after a revision of shelf prices we had to set aside provisions valued above 3m euros. We underwent a process of price reorganisation, with costs being frozen at a certain level. For a turnover worth 275m euros, fixed costs are estimated at approximately 20%," said Ostahie.
For 2007, Altex plans to boost its market share to 26%, which could generate a turnover worth 350m euros in 2008, believes Altex operations manager, Adrian Urda.
"The start of 2007 brought us an improved outlook. This is a prime moment for the Romanian economy and the market can change, especially when a company can be capitalised on this way," stated Dan Ostahie, commenting on the recent acquisition of Rompetrol by a company from Kazakhstan.
In the first half of the year, Altex posted a turnover worth 112m euros, up 25% from the 80m euros derived during the same period in 2006, and also announced a 10% increase in its profit margin.
"The technology changes, which can be best exemplified through the expansion of the LCD TV segment, as well as by development of housing projects, which helped bolster Altex's turnover," said Ostahie. He believes the same factors will contribute to the market's expansion, which could be worth between 950m euros and 1 billion euros in 2007.
Altex's H1 sales were also driven up by an increase in sales (per square metre) in the networks of Altex and Media Galaxy.
By year-end, the company expects to cover a retail area of more than 100,000 square metres after the finalisation of the 20m-euro investment programme. The improved forecast for next year has strengthened the retailer's growth outlook, with Altex to enter online retail through a specialised website. "In 2008, we'll also resume our expansion plan related to Bulgaria, which we abandoned in 2005 amid falling results". Ostahie also said he did not plan to sell a stake in the company, at the moment, in order to raise funds for development. "A possible floatation could take place in 2009, which may include Altex among public companies, and also other forms of transactions," explained Ostahie.
Altex
Expects to reach an income worth 6m euros by yearend, after it last year posted 3.9m-euro in losses
Has revised its forecast for this year's turnover growth from 275m euros to 300m euros
For 2007, plans to boost its market share to 26%, which could generate a turnover worth 350m euros in 2008
In H1 posted a turnover worth 112m euros, up 25% from 80m euros derived during the same period in 2006, and announced a 10% increase in its profit margin
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