Despite the fact that the main raw material for making chemical fertilisers became 5 percent more expensive early in June, chemical fertiliser producer Amonil Slobozia has revised its full-year result expectations upwards.
Though shareholders in April endorsed a budget that projected 154 billion ROL losses for 2004, Amonil is now hoping to conclude the year with 56.9 billion ROL profit.
The budgeted profit is more than double the profits seen last year, when Amonil, like most Romanian chemical fertiliser producers, benefited from the subsidies granted by the State to small farmers to buy fertilisers.
Amonil had logged 23 billion ROL in profit in 2003. The State no longer subsidises fertiliser purchases by Romanian farmers, but the increase in the price of fertilisers on the international market makes up for the lack of subsidies. “We adjusted the spending and revenue budget because the fertiliser prices on the international market went up,” says Victor Dobrescu, Amonil’s general manager.
Early this year Amonil was even faced with suspending operations and making 900 out of its 1,100 employees redundant. Amonil’s chief executive says that this is out of the question this year. The budget, however, projects a decline in sales from 2,159 billion ROL to 791 billion ROL.
Amonil’s shares have been the stars of the Bucharest Stock Exchange (BSE) in the last few weeks, with the price more than tripling in a matter of days. The company’s shares are among the favourites of stock market speculators, due to the low price and relatively high liquidity. The last transaction was conducted at 390 ROL/share. Calculated at this price, the capitalisation of the company stood at 13.1 million dollars.
Amonil’s main shareholders are Eurotrading Chemicals and Romferchim, each owning 28 percent.
Amonil concluded the first quarter of 2004 with 10.7 billion ROL (266,000 euros) net profit, down 82 percent in nominal terms from the same time last year, when it was making net profits of 57.4 billion ROL.
First half financials are due out on August 15.