Oltchim records five-time higher profit

Ramnicu-Valcea-based Oltchim company ended the first half of this year registering net profit almost five times higher as compared to profit posted during the similar period of last year.

Oltchim’s net profit climbed from 21.8 billion lei on the first six months of 1999 to 98.8 billion lei, turnover posted during the first half standing at 2,449 billion lei, a level that makes it possible for Oltchim to reach the projected value of 4,060 billion lei. The increase in turnover was backed up by the raise in revenues derived from exports, which rose from 533 billion lei to 1,181 billion lei, on the first half of the year.

Like other companies that destine a significant part of their output to the export, Oltchim benefited from the Government’s decision to cut down the tax on income derived from exports from 38 to 5 percent, a measure that led to a genuine explosion in profits and that proved to be an efficient incentive for exports.

Last year, Oltchim registered net profit amounting to only 6.6 billion lei, amid turnover worth 3,130 billion lei. Over 58 percent of net profit will be distributed for the set up of legal reserves and own development funds, while the fund for the employees’ contribution to profit will account for 8 percent of net profit. The dividend fund was settled at 2.2 billion lei, gross dividend coming to 6.8 lei per share.

For this year, Oltchim plans to raise its turnover by 29 percent, to 4,060 billion lei. At the same time, the company wants to increase its net profit 25.5 times, to 169.6 billion lei.

On August 11, the company’s shareholders approved the company’s share capital raise by almost 20 billion lei, after the Court of Accounts verified a previous revaluation of the company’s patrimony, which included a smaller sum. Thus, the company’s share capital will increase by 19.7 billion lei, from 343.3 billion lei.

The company’s development seems however to be sustained this year as well by the increase in the indebtedness degree.