Severnay shipyard unsure of forecasts

The management of the Severnav Drobeta Turnu-Severin shipyard says the heavy fluctuations on the forex market are preventing it from making accurate forecasts for results the company expects to achieve this year. “It is hard to make estimates for financial results due the heavy fluctuations of the euro and dollar exchange rates. The exchange rate trend so far leads us to believe we will finish the year with losses, given that all our contracts were concluded last year and calculated in euros, while payment is made in ROL. At the same time, raw material prices on the domestic market are on the rise, which again affects our business,” says Stelian Stancioiu, Severnav’s chief executive. The appreciation of the ROL against the euro and the dollar, and the increase in prices for sheet metal, the main raw material used by Severnav, were the most important factors that lead to the company posting losses at the end of last year. The sheet metal price in euros almost doubled last year, with the base price (no other additional expenses included) reaching 580 euros per tonne. Severnav posted 2.7 million euro-losses in 2004 against a turnover of 23.6 million euros. It made a net profit of nearly 7,000 euros in 2003 and sales of 9.8 million euros. ZF