Falling tiles

WSE-listed ceramic-tile manufacturer Opoczno recorded a net loss of zł.2.2 million in Q2, while H1 saw a loss of zł.6.6 million. That's compared with a profit of zł.13.9 million in H1 2005. However, revenues from sales rose from zł.189.4 million in H1 2005 to zł.199.1 million in H1 2006, and the company's CFO, Jacek Bagiński, says that Opoczno should be in the black for the whole of 2006. "We hope that net profits will grow substantially in quarters three and four," he says.

According to the management, the loss stems from higher marketing spending, investments in its retail structure and changes in the range of products offered. The company has introduced new tile designs that will be 50 percent more expensive than previous collections.

The company's CEO, Mirosław Godlewski, stresses the management's determination to cut costs and hopes that the boom on the construction market will translate into increased ceramic-tile sales. Godlewski also emphasizes that exports in Central, Eastern and Southern Europe have been rising. In Q2, exports amounted to 37.7 percent of sales revenues, compared to 26.6 percent in Q2 2005. This year Opoczno registered its daughter companies in Ukraine and in Russia, and it wants to acquire firms in the latter market.

With a 22.3-percent market share, Opoczno is one of the biggest producers of tiles in the Polish market. The company debuted on the WSE last year, but its stocks are now worth about 60 percent of the IPO price.