Amica washes away profit
Amica, the largest producer of white goods in Poland, disappointed the market with its 2002 full-year results, which failed to hit management targets.
The company finished last year with €1.22 million (zł. 5 million) net profit, instead of the planned €3.57 million (zł. 14.8 million), down €555,000 (zł. 2.3 million) compared to 2001. The firm's sales income increased 8% to €223.4 million (zł. 925 million) from €206.8 million (zł. 856.2 million) in 2001.
During the first seven months of 2002 Amica operated according to the plan. But then the unexpected introduction of customs duties on steel in August increased production cost by €362,000 (zł. 1.5 million). According to Wojciech Kaszyński, Amica's president, this was the main factor that disrupted cost-cutting projects.
The duties had a serious impact on fourth-quarter results. The company reported a €386,000 (zł. 1.6 million) loss versus a €1.78 million (zł. 7.4 million) net profit in the fourth quarter of 2001. The poor fourth-quarter results were also influenced by Amica's delay in launching a new line of washing machines, caused by the lack of electronic components. Production was postponed to March 2003. A holdup in the production of new refrigerators also depressed the quarter's results.
Kaszyński plans to keep a strong grip on the company's 21% share of the domestic white-goods market. Amica will also focus on increasing exports to 43%, up by 8% over last year. The successful launch of a new brand of refrigerators and two new brands of washing machines over the next two quarters should prove a major factor in achieving those goals. "Besides, we will be excluded from paying the custom duties on steel needed for producing our goods. The duties will be refunded to us after 200 days," he said.
Amica's export performance has been shining since 1999. The company plans to raise exports by expanding into the post-soviet markets, especially those joining the EU along with Poland. Germany is the main foreign market, with strong markets in the Czech Republic and Scandinavia.
But there is less of a sparkle around sales on the home front. In 2002, quantitatively, the market rose by 16.1%, while Amica's sales increased by 19.7%. The increase in sales by value was much lower, with 6.1% for the market and 11.1% for Amica. Price-cutting across the market is a major factor, as a consequence of increased competition and lower demand. Yet despite the difficult trading conditions, Amica is increasing sales.
Amica plans to pay off €12 million (zł. 50 million) of debt which should help to decrease financial costs by about €2.4 million (zł. 10 million).
The company managed to maintain its position on the WIG 20, after the December 2002 correction, due to the increased market turnover at the end of last year. Amica is still on the slide, last week reaching its lowest share price - zł. 23.4 - since December 2001.
The company finished last year with €1.22 million (zł. 5 million) net profit, instead of the planned €3.57 million (zł. 14.8 million), down €555,000 (zł. 2.3 million) compared to 2001. The firm's sales income increased 8% to €223.4 million (zł. 925 million) from €206.8 million (zł. 856.2 million) in 2001.
During the first seven months of 2002 Amica operated according to the plan. But then the unexpected introduction of customs duties on steel in August increased production cost by €362,000 (zł. 1.5 million). According to Wojciech Kaszyński, Amica's president, this was the main factor that disrupted cost-cutting projects.
The duties had a serious impact on fourth-quarter results. The company reported a €386,000 (zł. 1.6 million) loss versus a €1.78 million (zł. 7.4 million) net profit in the fourth quarter of 2001. The poor fourth-quarter results were also influenced by Amica's delay in launching a new line of washing machines, caused by the lack of electronic components. Production was postponed to March 2003. A holdup in the production of new refrigerators also depressed the quarter's results.
Kaszyński plans to keep a strong grip on the company's 21% share of the domestic white-goods market. Amica will also focus on increasing exports to 43%, up by 8% over last year. The successful launch of a new brand of refrigerators and two new brands of washing machines over the next two quarters should prove a major factor in achieving those goals. "Besides, we will be excluded from paying the custom duties on steel needed for producing our goods. The duties will be refunded to us after 200 days," he said.
Amica's export performance has been shining since 1999. The company plans to raise exports by expanding into the post-soviet markets, especially those joining the EU along with Poland. Germany is the main foreign market, with strong markets in the Czech Republic and Scandinavia.
But there is less of a sparkle around sales on the home front. In 2002, quantitatively, the market rose by 16.1%, while Amica's sales increased by 19.7%. The increase in sales by value was much lower, with 6.1% for the market and 11.1% for Amica. Price-cutting across the market is a major factor, as a consequence of increased competition and lower demand. Yet despite the difficult trading conditions, Amica is increasing sales.
Amica plans to pay off €12 million (zł. 50 million) of debt which should help to decrease financial costs by about €2.4 million (zł. 10 million).
The company managed to maintain its position on the WIG 20, after the December 2002 correction, due to the increased market turnover at the end of last year. Amica is still on the slide, last week reaching its lowest share price - zł. 23.4 - since December 2001.
