In the first nine months of this year Silcotub Zalau, part of the international group Tenaris, the world''s biggest piping producer, posted net income worth 6.46 million ROL (1.8 million euros), half the value derived in the first half.
At the same time, Silcotub''s turnover for the first three quarters rose by 10.5% in ROL, to a value of 375.7 million ROL (103.8 million euros).
The company secured deals at a slower rate than in the first half, when turnover advanced at a rate of 44%, despite a 10% fall in pipe production, given the halting of production seen in March, when for several weeks the plant conducted repair works.
In the first three quarters of last year Silcotub Zalau logged losses of 29.5 million ROL (7.26 million euros).
The company''s officials could not be contacted for comment on these figures by the time of going to press.
One of the main factors harming Silcotub''s profitability is the higher price of electricity. About 15% of Tenaris Silcotub''s production costs are linked to electrical power, with utilities generally following an ascending trend in terms of prices in a bid to bring tariffs into line with the levels seen in the European Union.
Silcotub manufactures pipes made of carbon and unwelded low-alloy steels, used in the construction, oil and gas, power, chemical and car industries.
About 70% of the company''s production is destined to foreign markets in Western Europe, North America and Eastern Europe. On the domestic market, Silcotub''s main customers are Petrom Comtech and COM-GAZ. The company''s nine-month results were also hit by the fluctuations in the foreign currency market.
In the first nine months of this year Silcotub derived gross income worth 11.8 million ROL (3.26 million euros), with the gap between this and the net income being accounted for by expenditure linked to the delayed income tax payment, worth more than 5.34 million ROL (1.5 million euros).
Operating income stood at 10.72 million ROL. Silocotub also derived income from financial activities, worth 1.08 million ROL (300,000 euros), whereas in the first three quarters of 2004 financial losses amounted to more than 22.6 million ROL (5.56 million euros).
In a bid to increase the efficiency of its activities, Silcotub last month concluded several contracts, with a total annual value of 106.3 million euros. The most important of these was the supply contract concluded with Donasid Calarasi, which has recently been added to Tenaris'' portfolio. stelian.vezentan@zf.ro
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