Companies face serious financial problems

Polish companies may face serious financial problems as several to hundreds of firms may lose on currency hedging, the Economy Minister Waldemar Pawlak said on Thursday. The losses may total tens of billions of euros.

Losses may be felt by Polish companies that shelled out millions of złoty to settle foreign exchange contracts. "It is a threat to the Polish economy," Pawlak said during a televised meeting with coal miners in Suszec. "As far as we can see, threats linked to the problem may equal even tens of billions of euros."

However, due to the fluctuating Polish złoty against the euro, some firms have already felt the affects. Rzeczpospolita wrote on Wednesday that among those firms include Ciech (zł.100 million), Erbud (zł.47 million) and refractory materials maker Ropczyce (zł.19.5 million).

Some analysts have said that these contracts, especially undertaken by smaller companies, could weigh on the company results for years to come.

Source: Reuters, Rzeczpospolita