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Published on November 10th, 2017 | by The GC Team

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Gorenje increases profits but warns on 2017 targets

Gorenje Group reported an increase in revenue and profits for the first nine months of the year, despite a worsening performance in the third quarter.

The company warned that negative factors are also expected in the last quarter of 2017 and said that key objectives laid down for 2017 are not attainable.

The Group generated c.EUR 944 million of sales revenue in the nine-month period, up 4.8% on the same period last year. Comparable EBITDA was around 5% higher, at c.EUR 59 million. Net profit, at EUR 4.6 million, was up by 12.1%.

Sales of major domestic appliances, including the premium brands, and small domestic appliances increased.

“We also improved our geographical structure of sales and increased our revenue from other businesses,” the company said.

Performance in the third quarter was negatively affected by slower sales that fell short of the budget – especially in Germany and Great Britain, rising prices of materials and components, labour cost pressures, and a decrease in productivity resulting from a mass production launch for new generations of products.

In the nine-month period, an operating profit of EUR 18 million was generated – EUR 2.5 million less than in the equivalent period of the year before, due in particular to higher depreciation and amortization resulting from high investments into the update and development of product platforms for all product categories in recent periods.

“Considering the typical dynamics within the year, we expect to see the largest share of revenue in the last quarter, which in turn will also affect the overall performance. In view of the said negative circumstances, we find that all key objectives laid down for 2017 are not attainable, despite the many measures introduced to mitigate them,” the company said.

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