Business News

Gorenje Sales, Profit Up

Velenje, 30 May (STA) - Home appliance group Gorenje generated revenues of EUR 370.2m in the first quarter of 2011, a rise of 27.2% over last year. Net profit in this period amounted to EUR 1.9m, a three-fold increase on the first three months of 2010.

Gorenje's revenues were boosted by the acquisition of Swedish household appliance maker Asko in the summer of last year. Without Asko, the group's Q1 revenues would have risen by 14.4%.

But its profit would have been higher without Asko, at EUR 4.5m, as the new acquisition operated in the red in the first quarter of the year, Gorenje said in a statement on Monday.

Gorenje said the loss at Asko was a result of sluggish sales, which are expected to pick up in the second quarter.

Chairman Franjo Bobinac said that conditions on Gorenje's key markets were still uncertain and influenced by high unemployment and the financial problems of governments.

"Prices of raw materials are also back to record-high levels, which is affecting the operations of our competitors," said Bobinac.

"Gorenje is trying to deal with these negative trends by focusing on innovation and development and the launch of new products and services on new markets."

The group generated two-thirds of all its revenues in the home appliance division, with unit-based sales rising by 3.2%.

Revenue growth outpaced unit-based sales growth due to "an improvement in the structure of sales", said Gorenje.

Gorenje's supervisory board was acquainted with the first-quarter results at today's session.

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