Higher utility prices and strong RON plunge Altur into losses

Automotive component manufacturer Altur Slatina posted losses of 53,000 euros in the fist half of this year, compared to a 388,000-euro net profit in the same period last year.

Sales fell also, by 1.7%, compared with the six months to July 2004. The drop was caused by the negative trend of the RON/EUR exchange rate, as well as increases in natural gas and electricity prices. Production for export accounts for more than 75% of Altur”s total revenues.

“The social and economic context of the first half of 2005 did not provide a favourable climate for Altur, one that would have allowed it to achieve good results. Although the volume of physical output did go up, compared with the same time last year, operating revenues were smaller,” the company”s half-year report shows.

The automotive component manufacturer had forecast gross profits of more than one million euros (3.9 million RON), up around 80% on the previous year. Altur posted net profits of 0.4 million euros against a 21 million-euro turnover in 2004.

At the time Altur signed its contracts for this year the domestic currency was much weaker, meaning the company”s estimates were not confirmed.

Altur intends to improve labour productivity this year through investment and upgrades worth 1.74 million euros (6.37 million RON).

The automotive component industry in Romania has attracted large investments in the hundreds of millions of euros over the last few years. These either went to greenfield-type projects or partnerships with local companies.

“With the domestic currency now gaining ground against the euro, the results mentioned could not have been achieved had it not been for Altur”s efforts in boosting productivity through investments,” the report continued.

Altur”s main products are cast aluminium parts (over 60% of its turnover), pistons, engine sets and brake pumps.

Altur”s products are used in cars, tractors and agricultural machinery, as well as commodity and passenger vehicles. The company also manufactures parts for the electrical industry and heating systems that run on natural gas.