ZF News

NBR has low risk appetite: Bulk of foreign reserve placed in European bonds

The NBR (National Bank of Romania) placed 85% of its foreign exchange reserves in bonds, and only 15% in cash and deposits. Last year, the central bank derived 1.45 billion euros in revenues from managing the international reserve, 330 million euros more than in 2007. The National Bank had bonds worth 87.3 billion RON (21.8 billion euros) in its portfolio at the end of last year. A little over 42% of the bonds were issued by European treasuries. The central bank also invested in certificates and bonds issued by the US Treasury and by other international financial institutions boasting a very good rating, such as the European Investment Bank, EBRD and the International Bank for Reconstruction and Development, according to data from the NBR’s 2008 report. At the end of last year, short-term bonds (with less than one-year maturity) were worth 25.23 billion RON, 43% more than a year before. ZF

Second privatisation of Electrica Oltenia: 315m euros for 49%

Czech group CEZ is offering 314.6 million euros to the Property Fund and to state-held Electrica to fully take over CEZ Distribution and Sales (formerly Electrica Oltenia), where it holds 51%. The price is almost double as high as that paid for the majority stake four years ago. The CEZ offer puts the two companies at 642 million euros in overall value, with CEZ Distribution being the more valuable one. The offer was made in line with the privatisation contract, according to which it has the option of purchasing the remaining capital. In 2005, when Electrica Oltenia was privatised, CEZ acquired 51% of the company’s capital for 166.5 million euros, putting Electrica Oltenia’s value at 326.4 million euros. In 2007, Electrica Oltenia was broken down into two companies: CEZ Distribution and CEZ Sales. CEZ Distribution posted around 66.9 million euros in net profit last year, up 50% against the previous year, but so far has disbursed no dividends. ZF

Farmexim budgets 3-4% profit margin

Drug distributor Farmexim, one of the leading players on the drug distribution market, expects a 3-4% profit margin after in 2008 it posted 24 million RON (6.5 million euros) in losses. Last year, the company started a cost cutting programme, which included transport cost cuts, salary freezes and employee cutbacks. The effects were felt in the first quarter when Farmexim posted a 3.8 million-RON (0.9 million-euro) net profit. For 2009, Farmexim budgeted a 20% turnover rise, to 725 million RON (172 million euros). The 3-4% margin would mean a profit of over 21 million RON (5 million euros). “The overall economic situation is again rather delicate, and it will definitely change systems and mentalities, both internationally and locally. This year started with the global economic crisis looming over, and the first half of the year was a trying time for many players in the pharmaceutical industry,” said Ovidiu Buluc, Farmexim’s majority shareholder. ZF

Caroli posts 29m euros six months into the year

Caroli Foods, one of the leading charcuterie producers on the Romanian market, ended the first half of this year with a 29 million-euro turnover, up 1% against the first half of last year. However, the company’s operating profit rose by 4% in the same period, to one million euros. “These six months were tough. From January this year until May, the charcuterie market slipped 1%, after a 7% rise in 2008. Caroli’s rise has to do with investments made in the brands,” said Andrew Taylor, commercial vice-president of Caroli Foods. For the end of this year, representatives of Caroli Foods expect the turnover in euros to remain the same as in 2008, when the producer posted an around 69 million-euro turnover. “In RON we will see a rise, but, due to the exchange rate, the company’s turnover will stagnate in euros,” he added. ZF