Imsat sales 75% up, profit below estimates

A several million dollar contract with General Electric, the modernisation of the signalling system on the Bucharest-Brasov railroad section and the retooling of a Lafarge cement factory in Jordan. All these significantly boosted Imsat Bucharest’s turnover last year, from $18.6 million to $32.7 million. The profitability of the company, however, remains low, with last year’s net profit reaching 4.58bn ROL ($138,600).
Still, the profit is higher than the 1.61bn ROL one in 2001.
“The profit is much below our initial estimates, because the completion of our contracts with SNCFR and Lafarge was postponed for 2003. Profit in such cases is not made any time sooner than the date of the last bill issued. Had the two contracts been completed, we would have concluded 2002 with $1.2 million in net profit,” Stefan Varfalvi, Imsat chairman said.
Varfalvi specified the 2003 profit will therefore be more than $1 million higher than usual.
The 75% turnover boost in 2002 pushed Imsat way above the peak activity level registered in 1998 due to the telecom constructions boom. Imsat had registered more than $20 million in turnover back then, only to make less and less, coming to post approximately $12 million in 2000.
“Imsat will stabilise at $30-$33 million turnover in the next few years. We will have some of the current contracts concluded next year, while new ones will start being carried out. One of such contracts is the retooling of the cement plant in Alesd, where we will focus on industrial automation,” the Imsat chairman specified.
The plant in Alesd is held by the Swiss Holcim Group and the retooling contract signed with Imsat is worth $10 million.
“The turnover growth last year caused us some cash flow problems, but we managed to overcome them, thanks to our shareholders. We have, however, attained an activity level that will allow us to make good profits in the future and avoid money troubles,” Varfalvi concluded.