Altex revises estimated turnover down by 30m euros

Altex, the largest electronics and home appliances retailer on the local market, has downwardly revised its estimates for this year’s turnover to 400 million euros, after, at the beginning of 2008, the company forecast turnover worth 430 million euros, up 37%.
“The revision comes as a result of the new provisions made by the NBR (National Bank of Romania) on limiting the credit risk, and amid the European financial crisis, which has already had a negative impact on the majority of countries and will be felt in Romania in the coming few months,” said Dan Ostahie, president of Altex.
He added that the new NBR provisions would indirectly affect the home appliances sector, via a reduction in the consumption of durable consumer goods, in the wake of limited access to loans, which will lead to a decline in residential sales.
“This is also a realistic forecast because of delayed projects, postponed until next year and forecasts regarding the consumption of Romanians living abroad, who return in July and August,” added Ostahie.
In the first six months of the year, the company opened six new stores, whilst the retail area increased 17% and reached 92,500 square metres, in the wake of a 4 million-euro investment. The projects that will start operating in the second half of the year will require investments worth 7 million euros.
Even though, over the last few years, July and August were peaks for home appliance retail, because this is the time when Romanians working abroad come home for holidays, Altex estimates this year will see a return to levels comparable with other months of the year. “The crises in Spain and Italy will reflect on Romanians living there. In a recession, even though incomes are the same, consumers will not make the same acquisitions because, after all, purchases are a matter of preference,” he also said.
In the first six months of the year, Altex reported a 47% turnover increase, to 170 million euros, while the market advanced 20% against the first half of 2007.
The company’s operating margin was below the beginning-of-the-year forecast, around 2% of the turnover (3.4 million euros) due to the impact of the exchange rate trend. Losses generated by the trend of the exchange rate amounted to 0.6% of turnover, i.e. around one million euros.