Electromagnetica Posts 8% Rise In 2010 Net Profit, To RON26M

04.19.2011 By Andrei Circhelan

Romanian electrical and measuring device maker Electromagnetica Bucuresti (ELMA.RO) Tuesday announced an 8% decline in its net profit for 2010, to 26.2 million lei (EUR1=RON4.091), from RON28.48 million in 2009.

Sales rose 18% on the year, to RON474 million, from RON400.47 million.

"While experienced competitors have disappeared from the market or are struggling, Electromagnetica has managed to shift its business strategy in accordance with the current trends on the energy market, where it holds a 3% stake," the company noted in a news release.

The company's budget for 2011, which is published on electromagnetica's website, includes forecast for RON400 million in sales this year, while the pretax profit should fall to RON17 million, from RON31.3 million in 2010.

In addition, the company plans to invest EUR12.7 million, plus VAT, mostly in upgrades at its hydropower plants.

The company holds 10 micro hydropower plants with a total installed power of more than 5 MW. Future plans target a capacity of 10-12 MW.

Electromagnetica is currently focusing on green energy production and the development of LED lights. Its intention is to invest EUR8-10 million in green energy production. The investment money would come from the company's own resources as well as from EU funds.

Electricity supply activities provided some 70%-75% of the company's sales in 2010, according to general manager Eugen Scheusan, with a profit margin of 2%-3% of sales.

This year, electricity sales should maintain the same percentage in overall sales, but profit is expected to drop, because purchase prices are higher, the official said.

"We aim to invest more in renewable energy production and to increase the amount of energy we supply. The LED division is also important for us at this time," Scheusan said.

More than 67% of the company's output goes to export.

Electromagnetica is listed on the Rasdaq market of the Bucharest Stock Exchange, but it plans a move to the main market by fall, Scheusan said.

Company shareholders include the employee association with a 31.2% stake and regional investment fund SIF Oltenia (SIF5.RO) with a 15% stake.

At press time, Electromagnetica shares were down 3.23%, to RON0.353.

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