Saving room for later

WSE-listed pasta producer Makarony Polskie reported a Q1 2008 net loss of zł.1.732 million, down from its profit of zł.324,000 12 months ago. The company's revenues were also down, to zł.19.1 million - a five percent drop on Q1 2007.

"The key factor in the loss was the change of our client base and contract portfolio at the end of 2007, as well as the realization of new contracts which began as late as in February and March," the company's president Paweł Nowakowski explained. Also contributing to the negative numbers were rising food prices, especially flour, and the cost of integrating two food-sector companies that Makarony Polskie took over last year, Abak and Stoczek.

By the second quarter, the group hopes to bring both Makarony Polskie and Stoczek into the black, and make Abak profitable by Q3. The company says it will do this by increasing production, as new contracts begin to be realized.

Savings generated from the company's restructuring plan and a leveling off in food prices are expected to contribute to the growth too. The group hopes to save some zł.200,000 thanks to a reduction in administrative and energy costs, the automation of production at Stoczek and Abak, and the outsourcing of transportation services.

Krystyna Świetlik from the Institute of Agricultural and Food Economics - National Research Institute  said that the demand for pasta is growing and will continue to do so by 2.5 to three percent annually.

"Poles are spending less and less time preparing meals, and the range of pasta on the market is very broad," Świetlik explained. "The demand for pasta will also be spurred by the growing price of rice."