The złoty overheats Seco/Warwick

Seco/Warwick, one of the world's largest manufacturers of industrial heat processing equipment, earned zł.115 million in revenues and a zł.1.38-million net profit in H1 2008. Those figures represent y/y falls of 14.5 percent and 84.3 percent, respectively, for the capital group.

The rising strength of the złoty against the dollar was largely responsible for the group missing its H1 profit target, which stood at around zł.10 million. Additional costs were incurred due to a change in accounting practices and due to the need to furnish subsidiary LTZ Elterma with new equipment.

"The strengthening złoty did not allow us to show the full outcome of our development strategy and forced us to revise our financial projections," said Andrzej Zawistowski, the vice president of the management board.

The company lowered its 2008 financial forecast from revenues of zł.317 million to zł.268 million, and from a net profit of zł.35 million to zł.14 million.

Seco/Warwick increased its 2008 order portfolio in H1, however, to $50 (zł.112.6) million. That was $10 million more than in H1 2007.

The first half of the year was a time of intensive restructuring for the group and it also signed a number of new contracts with clients from various industries, according to Zawistowski.

"We expect the Polish currency to gain in value less intensely and H2 2008 to bring a visible increase in profitability," he added.