Aker Braila slips into the red

Aker Braila shipyard has posted loses of 4.4 million euros (16.4 million RON) for the first half. The company was severely affected by the rise in prices for the sheet metal used in the shipbuilding process, its main raw material. The company made net profits of 0.12 million euros (0.48 million RON) during the corresponding period last year. The poor results for the first half were also due to a decision by the Netherlands Arbitration Institute of Rotterdam “in favour of Gefonzo BV, which led to the necessity to set up a 5.7-million-euro provision,” reads a report by Aker Braila”s management. Aker Braila received 4.4 million euros in penalties for a shipbuilding contract from 1995, which the company did not honour. The contract was for the delivery of eight ships to Gefonzo BV, which saw the latter sue for damages due to breach of contract early in January 2001. Aker Braila will also have to pay interest on the damages it owes to Gefonzo that have accrued since 2001. The company”s business was also hurt by the rising prices for the sheet metal used in the shipbuilding process. The raw material costs at the shipyard tripled in the first six months of the year, to 13.6 million euros (50.8 million RON). Despite this, Aker Braila still managed to achieve an increase in sales in the first half to more than twice the level seen for January to June 2004. The shipyard posted 20.9 million euros (76.7 million RON) in turnover. The circumstances on the international market are extremely favourable to shipbuilders in terms of demand. High demand from China has given the domestic shipbuilding industry one of its best periods in its entire history. ZF