Zagreb, March 31 2008 – In 2007 Viro Sugar Factory realized 746.13 million kuna revenues, which is a 16.69% increase compared to the previous year, while net profit decreased by 10.11% on 91.521 million kuna.
During last year Viro manufactured record 131,287 tons of sugar, which presents a 22.44% rise compared to 2006.
Sale on the Croatian market increased by 24.96%, on 68,491 tons of sugar. Viro strengthened the leading position increasing its market share on 66 percent. Compared to 2006, total sale of sugar decreased by 4.9 percent amounting to 121,136 tons of sugar.
Profit decrease is a result of exceptionally bad agroclimate conditions whereupon Viro's subcontractors did not manage to deliver sugar beet from 160 hectares of arable land. Considering the heavy downfall, sugar beet harvest was extremely difficult which caused expenses doubling, but given the fact that the subcontractors are Viro's longtime partners, Viro Management decided to pay for undelivered sugar beet and increased harvest expenses. Subsequently, the factory manufactured 6,000 tons of sugar less then planned. "Viro is a responsible company, primarily to our suppliers, with whom we invest joint efforts in raising the quality of sugar beet. We believed that it was important to help them and enable them to prepare for the upcoming season", stated Željko Zadro, Viro CEO.
Even though the production of sugar in 2007 increased by 22.44% compared to the year before, realization of sugar in the referred period decreased by 4.9% compared to the same period last year. The main reason is the fact that this year sugar refining campaign started almost a month later than in 2006, due to which the planned sugar amount could not be exported by the end of the calendar year.
Investments in 2007
In 2007 Viro invested 10 million euro in modernization of the factory. The largest investment amounting to 4.5 million euro was placed in the purchase of equipment of Tovarna sladkorja Ormož from Slovenia which stopped manufacturing earlier that year. The purchased equipment will enable automatization of production and approx. 30% capacities increase. Closing stages of equipment implementation are planned by the end of 2009.
In June 2007 Viro was the first sugar factory in Europe to receive halal certificate which enables placement of sugar on international markets with halal label and halal quality logo and facilitates the process of halal certification for large buyers and partners of Viro.
In January 2008 Viro was certificated as Coca-Cola's supplier in Croatia and Central and Eastern Europe. Given the fact that the certificate comprises both crystal and liquid sugar, besides to Coca-Cola Croatia, Viro is now enabled to provide sugar to all Coca-Cola companies in the region.
Price movements and shares trading
At the end of 2007 the price of Viro's share amounted to 1625.0 kuna which presents a 144.36% increase compared to the end of 2006. During last year share turnover amounting to 621,114,812.13 kuna was realized, while market capitalization at the end of the year totaled 2,253,333,875 kuna. Profit per share amounts to 66.0 kuna.
Development plans for 2008
Investments in factory modernization are to continue in 2008, primarily in increasing production efficiency by implementing the equipment of Tovarna Sladkorja from Ormož and increasing the quality of raw material. By the end of the year, increasing daily sugar beet refinement on 6,500 tons is in plan, as well as increasing daily production of white sugar on 1,000 tons, while energy consumption is to decrease by over 30% in average. The new equipment is to enable Viro to refine raw sugar from the countries of Africa, Caribbean and Pacific, as well as 9 months long refining campaign with annual production of 235,000 tons of sugar. 2008 plans encompass the production of 100,000 tons of sugar from imported raw sugar and, in accordance with export quotas, 60,000 tons of sugar from sugar beet.
Factory modernization will also have positive effect on environment protection as lower energy consumption will enable decrease of CO2 emissions by 20 percent.
Viro will continue to invest in its subcontractors in order to ensure higher sugar beet quality and increase of yield per hectare on 10 – 11 tons. This year Viro is to invest 40 million kuna in sugar beet production in order to subsidize subcontractors' purchase of seed, fertilizer and protective agents as well as mechanization services.
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