Bigger sales, smaller profit for Otelinox

Combinatul de Oteluri Speciale (Special Steel Plant) Otelinox Targoviste posted a very small profit in Q1 compared with last year when it was making 24bn ROL, even though turnover did go up 24%. Net profit in the first three months this year amounted to a mere 0.8bn ROL. The about 40% increase in spending in the first quarter was twice higher than the increase in revenues. Total spending was worth 233bn ROL, while accounting revenues amounted to 234bn ROL. The international steel market is going through a time of recession, primarily because of the drop in demand from the European and North American markets. The two are absorbing half of the world’s production of stainless steel, for instance. Last year was not that good for Otelinox, either. Profit in real terms shed 40% and totalled 191bn ROL ($5.8 million), while sales were 8% higher. The plant makes rolled goods from special steels, stainless steel sheets and strips. Otelinox was expecting 1,500bn ROL revenues for this year, the same as in 2002 and 25% gross profit decline to 170bn ROL. This year’s investments are supposed to reach $4.5 million. ZF