Policolor Bucuresti posts profit

Paint and chemicals producer Policolor Bucuresti on the first nine months of the year posted net profit of 13 billion lei, company managers estimating that net profit will stand at 5 billion lei at the end of the year.

“Our activity depends on the season, the first and the last quarter being the periods when sales are low and we register losses,” Policolor general manager Marius Golopenta told Ziarul Financiar.

Between January and September, the paint producer posted preliminary total revenues of 359 billion lei, about 10% higher than those registered last year, and they are expected to increase up to 450 billion lei by the end of the year.

Policolor shares used to be among the best performers of the market but investors have lost interest in the paint and chemicals producer.

Following the losses registered last year, Policolor was downgraded to the second tier of the Stock Exchange, the price of the shares amounting on Thursday to 2,250 lei. The value of Policolor shares this year varied between a high of 5,500 per share and a low of 1,220 lei for one share.

Policolor manager explained that important investments would be made in the following period, with a view to modernising output and lab equipment, to developing marketing activities and launching new products.

The market share held by Policolor is currently estimated at about 25%, 35% for white goods market and 20% for the industrial sector.

As to car industry products, Policolor controls approximately three quarters of the market, while its market share stands at 15-20% when it comes to decorative products.

“Next year we will try to push up these market shares,” Golopenta commented. The most important industrial customer of the company is Automobile Dacia automaker.

The unfavourable financial situation registered last year by laquers and paint producer Policolor Bucuresti was maintained at the beginning of the current year, the company having reported on the first quarter losses of about 15 billion lei, three billion lei higher than those posted on the entire year 1999.

These negative results were triggered by financial losses of 15.88 billion lei, which were based on the foreign currency credit contracted by Policolor officials for buying the Orgachim plant in Bulgaria.

Policolor managers expect Orgachim to post total revenues of 40.8 million de leva (approximately 18.2 million dollars).