Galati Shipyard: fewer, but more profitable deliveries

Damen Galati Shipyard last year derived gross income worth 6 million euros, similar to that of 2004, despite the value of deliveries the company made in 2005 amounting to 58m euros, about 18% lower year-on-year.

“Sold and paid for production last year reached 58 million euros. This indicator is more relevant for our activity because it does not include production still in stock or under execution, to be delivered this year,” stated Gelu Stan, Damen Galati general manager.

Initially, the manager of Galati-based shipyard had estimated sales of 70 million euros for last year, similar to 2004, but the respective level was not reached because of the delay in some deliveries.

According to him, Damen Galati shipyard last year delivered 25 ships to foreign customers, and in 2006, the number of delivered ships is set to amount to 33, which will generate a more than 55% increase in revenues compared with last year.

“This year, we will sell 33 ships and we forecast receipts will be worth 90 million euros,” specified Stan.

However, the activities of Galati-based shipyard were hit early this month by the advance of the Danube”s level, which flooded almost half of the site.

As a result, the company”s management declared a state of force majeure and sent about 200 employees on leave for an indefinite period.

According to the company”s management, losses incurred due to these floods are put at 0.5 million euros, but, if things do not get any worse, these losses are not likely to have a considerable impact over the full-year results of the company.

Damen Galati is one of the biggest shipyards in Romania and the third largest industrial producer in Galati county.

The company has more than 3,000 employees.

The company”s entire production is destined to export, with the main customers including European Union countries, such as Germany, the Netherlands, Ireland, Great Britain and France.

The shipyard is owned by the Dutch group, Damen Shipyard, which in April 1999 acquired a 51% majority stake from the former State Ownership Fund in the Galati based Shipyard. Subsequently, the Dutch group has raised its stake to 98% in the company”s capital.

Over the past five years, the Dutch group has invested some 30 million euros to modernise the shipyard, and for the next three years the majority shareholder has earmarked investments worth as much as 15 million euros.

Recent years have been a peak period for the activities of Romanian shipyards, which have been practically flooded with orders, having production capacities fully booked until the end of year 2007.

andrei.chirileasa@zf.ro