Damen Galati expects 100m euro revenues

Damen Galati shipyard will cross the 100 million-euro revenue threshold in 2006, due to the contracts it is currently filling.

The company anticipates to collect more than 106 million euros from the output sold, twice more than this year’s estimated results and nearly 50% higher in euros than the estimated last year’s figures.

“This indicator (output sold and paid for i.e.) is a component of the turnover, and is more relevant for our business given that there are certain ships whose building cycle does not begin on January 1 and end on December 31 of the same year and may end in the following year’s summer, for instance,” commented Gelu Stan, general manager of Damen Galati Shipyard.

The increase in revenues over the next few years will be largely due to a 160 million-euro contract the company is currently working on. This contract will have Damen build 10 container carriers for a German client, with delivery scheduled to begin this year and last until the end of 2006.

The profit growth pace will be slower than that of the revenues. Damen Galati made gross profit of 6 million euros in 2004 against a 71 million-euro output sold and paid for.

The interval between the moment when the construction of a specific ship begins and the moment when it is completed and delivered to the customer is one of the factors that made the company’s gross profit be lower than in 2003, when it stood at 8.8 million euros. The gross profit and output sold last year are just preliminary figures.

The company’s results in 2004 were also affected by the appreciation of the ROL against the single European currency, as well as by the increase in the price of the sheet metal used in the shipbuilding process, the main raw material, which nearly doubled last year. The increase in the raw material prices along with the unfavourable fluctuations of the exchange rate are among the main factors that will have a negative impact on the company’s profit in the next few years, as well. catalin.ciocan@zf.ro