The group associated around the home appliance manufacturer Gorenje increased operating net revenue by 13% to SIT 53.8bn (EUR 224.5m) in the first quarter, compared with a year before, while net profit went up by 4% to SIT 903m (EUR 3.77m). Gorenje chairman Franjo Bobinac assessed these results as good on Thursday.
The revenue generated in the first quarter represents 23% of the total net revenue planned for this year, while the profit made so far represents 20% of the target figure.
The parent company, Gorenje, generated SIT 35.6bn (EUR 148.5m) in net sales revenues in the first quarter, up 3% over the same period last year. Net profit increased by more than 5% to SIT 804m (EUR 3.36m).
According to Bobinac, European markets continue to be characterised by slow economic activity, low consumer confidence and competitive edge reduced over the weak dollar compared to the euro. All these factors contribute to lower demand for durables, among them household appliances, while also increasing competition and price pressures.
Gorenje continues to feel the consequences of Slovenia's entry into the ERM II exchange rate mechanism and the related fixation of the tolar-euro exchange rate coupled by a relatively high inflation rate, Bobinac explained.
He expects high prices of strategic and raw materials will continue to pose challenge for the company. The prices of most raw materials have stabilised at all-time high levels, with the exception of petrochemical products, whose prices continue to grow on the wings of increasing oil prices.
"We'll neutralise these negative impacts by optimising and seeking for cheaper alternatives in supply sources, by selectively marking up our products and by streamlining costs in all domains."
Gorenje chairman said that the production of fridges and freezers at the Valjevo plant in Serbia would be launched by 2006. He also announced that Gorenje would probably open its office in Turkey.
Bobinac expects 40% growth in revenues on the Russian market, while he is less optimistic about sales on EU markets.
Management board member Ziga Debeljak meanwhile highlighted that the company would have to secure some 4 million euros this year for recycling under the new directive on waste electric and electronic equipment.
According to Debeljak, the company will try to shift as much of the costs on the consumers. He also announced the construction of a new recycling centre.
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