Konsorcjum Stali reports record financial results
In the third quarter of the year, the unit income of Konsorcjum Stali was PLN 320.4m when compared to PLN 94.9m a year earlier (an increase of 237.6 per cent). The operational profit amounted to PLN 10.3m, compared with PLN 2.7m in the third quarter of 2007 (an increase of 277 per cent). Gross profit amounted to PLN 7.9m, compared with PLN 2.4m (229.2 per cent up), while net profit increased by 217.5 per cent – from PLN 1.9m to PLN 6.3m.
After three quarters, Konsorcjum Stali had an accruing unit sales income of PLN 537.2m, compared with PLN 311.8m in the analogous period of 2007 (an increase of PLN 225.3m, i.e. about 72.3 per cent). Operational profit amounted to PLN 21.2m, compared with PLN 13.8m a year earlier (an increase of 53.6 per cent); whereas net profit reached PLN 14.5m, compared with PLN 10.2m a year earlier (41.4 per cent up). The report for the third quarter also shows an increase of total assets compared to financial statement for the previous quarter made up on 30.06.2008, which amounts to PLN 333 091 000, i.e. 199 per cent, from PLN 167 681 000 to PLN 500 772 000.
“Excellent financial results after the three quarters were achieved thanks to the merge with Bodeko and thanks to consistently carried out growth strategy of the two companies”, Robert Wojdyna, the President of Konsorcjum Stali assures. “Last year we sold shares in public offering promising the investors that Konsorcjum Stali will be developing and the effects of the synergy will be clearly visible. The third quarter results prove that we keep our promises”, Wojdyna adds. “Despite very difficult period, the beginning of structural steel considerable price adjustment, we succeeded in producing satisfactory results in the third quarter. I think that we confirmed our position on the market and our proficiency at running the business”, he adds.
In accordance with the Accountancy Act, Konsorcjum Stali’s profit and loss account for the three quarters of 2008 does not take account of Bodeko’s profit and loss for the first half year of 2008, i.e. the moment when it merged with Konsorcjum Stali. Bodeko, in the first half year, had as much as PLN 387.8m of sales income and PLN 15.4m of net profit. “The influence of the merger with Bodeko on Konsorcjum Stali’s profit and loss statement is shown only in the third quarter results”, Wojdyna explains.
Bodeko’s depreciation as a cause of profit reduction Net profit of PLN 6.3m earned in the third quarter would be almost a million PLN higher, but for the requirement to take depreciation deduction into account. Profit for the third quarter of 2008 already allows for the costs of high depreciation of the company’s positive value which was revealed in Konsorcjum Stali’s balance sheet after the merger with Bodeko Ltd. on 1st July; the revealed income is reduced by PLN 828 000 because of the company’s value depreciation costs. The company’s value, which is the result of the connection with Bodeko Ltd., and which is considered as price surplus of the Target Company acquisition over the lower fair value of the acquired net assets of the company, was calculated on the day of the merger as PLN 99 363 000. The Accountancy Act, on the basis of which Konsorcjum Stali draws up its financial statement, obligates to write off the company’s positive value and to charge the acquired result for the depreciation costs. Hence Konsorcjum Stali will be writing off the company’s positive value arisen after the merger according to straight-line depreciation method for 20 years, which is the maximum permitted period of company’s value amortization. If Konsorcjum Stali kept the accounts according to MSR (International Accounting Standards), it wouldn’t have to do this depreciation. “We consider changing the way of keeping the accounts into MSR from next year”, Wojdyna explains. “We are aware of the fact that taking account of Bodeko’s positive value depreciation costs is a mere formality”, he adds.
