Higher expenses keep Policolor''s profits in check

Paint producer Policolor Bucharest posted net profits of 6.6 million RON (1.83 million euros) in the first nine months of the year, up 7% in euros due to the appreciation of the RON against the European currency, yet slightly down in RON.

Policolor had posted 6.9 million RON (1.7 million euros) net profit in the same period last year.

The turnover made by the company amounted to 85.6 million RON (23.6 million euros), an increase of 33% on the same time last year. The company representatives were not available for comment yesterday.

Policolor logged nearly 6.16 million RON (1.7 million euros) profit from its core business, 32% lower than the profit in the first three quarters of last year.

The profit decline was the result of the growth registered for all expense categories related to the company”s operations, with these costs increasing by 37% to almost 21.8 million euros (nearly 79 million RON).

At the same time, operating revenues were slower to progress, increasing to 23.5 million euros (85.1 million RON).

The company announced it was planning to boost sales this year through expansion on the European Union market and through penetrating new markets, such as Libya, Thailand and Saudi Arabia, given that a significant factor in the increase of sales in the first half was their presence on the European Union markets.

The paint manufacturer also more recently announced that it wanted to sell approximately 15 hectares of land, complete with the buildings erected there, owned in SE Bucharest.

These pieces of property are worth between 7 and 8 million euros, according to information on the real estate market. Policolor will probably get less because taking down the buildings could entail significant costs for the potential buyers. The shareholders decided that they would not accept anything less than 6.6 million euros.

The Romanian paint market is dominated by three major producers: Kober, Dufa Romania and Policolor. catalin.ciocan@zf.ro