Euro decline hurts El-Co''s profits

Targul-Secuiesc-based El-Co Group, which manufactures electrical distribution and control equipment posted 19.1 million RON (5.2 million euro) turnover in the first half, up 2.9% on the same time last year when sales of the company amounted to approximately 18.6 million RON (5.6 million euros). The net profits the company made, however, went down in the first six months of 2005 to 910,000 RON (250,000 euros), 12.1% lower than in the same time last year. The main reason for the profitability decline is the appreciation of the RON against the main international currencies. “The exchange rate almost killed us. We export a lot and besides that, domestic prices are tied to the euro,” Nunca Viorica, the company”s financial manager said. El-Co in the first half exported approximately 36% of its output. Operating income witnessed an even sharper decline, as the company made only about 1.4 million RON (380,000 euros) income from its core business, 27% lower than in the corresponding period of 2004. “The profit was also affected by the rise in the natural gas prices. The raw material prices went up, as well,” Nunca said. ZF