Slatina-based Artrom (ART) pipe producer logged financial losses worth around 7.8m euros (25.4m RON) in the third quarter of this year, after the RON declined against the euro and the dollar.
The operating income partly offset the financial losses, which means Artrom's overall losses in this period amounted to 4.6m euros (15m RON), compared with net income worth 1.6m euros (5.9m RON) in the same period in 2006.
"Financial losses registered in Q3 were generated by the reassessment of the company's foreign currency debts against exchange rate levels in late September, which were higher than those posted during the middle of the year. The decline of the RON against the euro stood at 6.43%, while the domestic currency dropped 1.82% against the dollar," specified Adrian Popescu, company chairman.
At the end of H1, 2007, Artrom posted income worth 6.7m euros (22.2m RON) from its financial activities, amid domestic currency growth against the main currencies.
The RON has lost significant ground against the European currency in recent months amid foreign investors' concerns about the trend of the Romanian economy and also amid uncertainty on the international markets.
However, the higher-than-expected Q3 economic growth halted the RON decline, while the exchange rate stabilised around the threshold of 3.5 RON/EUR.
The company's operating income almost doubled in the first 9 months of the year against the same period in 2006, to 9.4m euros (31.4m RON). Income increased after expansion of production capacities early in the year, with Artrom's turnover witnessing a 64% increase in the first 9 months, to 120.3m euros (397.2m RON).
This year, the company borrowed 121.3m dollars (88.5m euros) from several firms in the group, according to Artrom representatives.
Of this sum, 47.3 dollars (34.5m euros) were used to refinance previously contracted loans, 28m dollars (20.4m euros) for temporary financing of raw material operating stocks maturing by yearend and 46m dollars (33.5m euros) were new loans for the working capital of the activity related to the new production capacities.
Artrom's production capacity was boosted by 100,000 tonnes in early 2007, to 200,000 tonnes.
"There will be further investments in 2008, so that the production capacity at the Slatina plant can reach 350,000 tonnes per year by 2011," says Adrian Popescu. Artrom investments are operated in synergy with the investment programme of TMK-Resita complex.
Artrom forecasts turnover worth around 157m euros (536m RON) for this year, up 65% from 2006 and income similar to the level budgeted at the beginning of the year, of 10m euros (34m RON), up 25% against the 8.5 million euro level reached in the first 9 months.
TMK-Artrom Slatina
In Q3 registered financial losses worth around 7.8m euros (25.4m RON), after the RON declined against the euro and the dollar.
Operating income partly offset the financial losses, which means Artrom's overall losses in this period reached 4.6m euros (15m RON), against net gains worth 1.6m euros (5.9m RON) in the same period in 2006
For 2007, Artrom forecasts turnover worth around 157m euros (536m RON), up 65% against 2006 and income worth 10m euros (34m RON)
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