Business News

Gorenje Returns to Profit in H1

Velenje, 26 August (STA) - The group around the Velenje-based household appliance maker Gorenje posted EUR 4.9m in net profit in the first half of 2010, compared to a EUR 18m loss in the same period last year. Consolidated sales revenues amounted to EUR 610m, up 7.4% year-on-year.

The parent company of the Velenje-based group said in a press release on Thursday that the group's earnings before interest and tax (EBIT) amounted to EUR 19.7m, while last year it posted a loss of EUR 7.5m.

The parent company generated EUR 296.6m in sales revenues in the first half of the year, compared to EUR 265m in the first half of 2009.

Net profit at the parent company in the first six months of this year amounted to EUR 1.05m, a significant improvement over the first six months last year, when the company posted a EUR 19.9m loss.

According to Gorenje's website, the group has manged to gradually increase the share of upmarket products and has consolidated its presence in the markets of eastern and south-eastern Europe.

The return to profitability was also spurred by cost-cutting, as the group reduced raw material costs by EUR 20.6m less and costs of services by EUR 15m in the period concerned.

Labour cost were up by nearly EUR 7m compared to the first half of last year, due to a general wage increase put in place after workers went on strike in September 2009, according to Gorenje.

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