Celje, 28 August (STA) - Cinkarna Celje, the Celje-based chemical company which is slated for privatisation, reported a slump in net profit for the first half of the year at EUR 3.4m, down 75% year-on-year. Sales revenue fell by 6% to EUR 88.8m in the period.
In the interim report released by the company on Wednesday, chairman Tomaž Benčina attributes the fall to the situation on the global titanium dioxide market but says that the lag behind last year's sales has been reduced month in month out, a trend that he expects to continue in the second half of the year.
The CEO says the profit generated trumps the projections, considering a loss of EUR 6.2m had been planned for the first half of the year and that most competition reported loss in the first quarter. Unless the economic turmoil is strained substantially, the company should remain in the black at the end of the year.
The main reason for better-than-planned results as pinpointed by Benčina is that the surpluses on the market of titanium dioxide pigment have been transferred unexpectedly fast onto the titanium ore and raw materials market, which created the conditions for a substantial reduction in purchase prices.
The company's exports dropped by 7% to EUR 76m in the first half of the year on the same period a year ago.
Capital expenditure was down 38% to EUR 2.6m due to pessimistic outlook for 2013, but Benčina expects the volume of investment to increase considerably in the second half of the year to modernise production and make it more environmentally-friendly.