Celje, 26 August (STA) - Cinkarna Celje, the Celje-based chemical company, saw its net profit plummet by 21% in the first half of the year to EUR 9.9 million while revenue was down 4% to EUR 88.7 million. Operating revenue decreased by 22% year-on-year, show the company's unaudited results, released on Wednesday.
Cinkarna Celje said that the sales revenue has reached 51% of the planned total for this year, while it warned that it changed is valuation system for stocks of finished products this year. This boosted net profit in the first half by 2.35 million, the company explained, adding the effect of the new validation would be neutralised in the second half.
CEO Aleš Skok assessed that given the current circumstances the sales drop had been minimal. The impact of Covid-19 was mitigated by the absence of Chinese producers on the European market at the beginning of the year.
"Reduced production and increased stocks with buyers affected sales negatively in the second quarter," Skok said, while assessing the drop was smaller than was the average on the titanium dioxide market.
Cinkarna spent EUR 5.6 million on investment in the first six months, which is less then a third of the planned amount.
The management of Cinkarna, whose financial situation remains stable, assessed that the results were objectively good and in line with projections.
The return of Chinese competition and the cooling of the global economy could impact results in the second half, but Cinkarna feels the targetted EUR 174.2 million in in total revenue for the year and EUR 14.1 million in net profit are still attainable.