In the first 9 months Podravka realized HRK 99.1 mln net profit

Realized sales revenue for the Podravka Group in the first nine months of the year was 2.568 million HRK, which is an increase of 3 % compared to the revenue for the same period last year, 2005. Realized net gain in the first nine months of 2006 was 99.1 million HRK, which is 16.6% more than in the same period last year.

Realized sales revenue for the Podravka Group in the first nine months of the year was 2.568 million HRK, which is an increase of 3 % compared to the revenue for the same period last year, 2005. Realized net gain in the first nine months of 2006 was 99.1 million HRK, which is 16.6% more than in the same period last year. Positive effect on this result has the outcome of litigation between Belupo d.d. and Avena d.o.o. from Kranj (net effect is about HRK 40 million) where assets reserved for compensation were released to Belupo d.d. This positive effect was partially diminished by net expenses of restructuring (about HRK 12 million).

Foreign markets marked sales revenue increase by 2%, while Croatian market marked revenue increase by 3%. As for foreign markets, it is worth pointing out that sales in the South Eastern Europe market grew by 6%, Eastern Europe 7% and Western Europe, Overseas countries and Orient 5%, while the market of Central Europe marked sales drop of 7%.
As for strategic business areas, sales in SBA "Food and Beverages " grew by 4 , while SBA "Pharmaceuticals" marked sales drop of 2, mostly contributed by 4% sales drop on Croatian market as a consequence of medicines price reduction due to continuing restrictive policy of the Croatian Health Insurance Institute and price drop for products Irumed and Iruzid, which were transferred to the generic group of medicines.

Sales growth compared to the same period last year was realized by the following product groups: meat and meat products 8%, fruit and vegetables 8%, baby food, desserts and snack 6%, Podravka dishes 5%, commercial goods 5% and Vegeta – food seasoning 1%. The increase was mostly contributed by Vegeta sales increase in Western Europe, Overseas countries and Orient (7%), Eastern Europe (6%) and South Eastern Europe and Croatia (2%). Beverages sales remained at last year’s level and due to the overall drop on the water market in Croatia there is no expected sales growth till the end of this year.
Sales in the group of rice, legumes and other products dropped by 10%. This drop was mostly contributed by the drop in the Czech market.

Also worth pointing out is signing of the new Collective Agreement which introduces individual rewarding of all employees, taking into consideration their individual contribution and thus the Collective Agreement does not highlight basic salary but incentive/destimulating part of the salary, depending on the quality of the work performed by individual employees. New products were also launched in the stated period – Čokolino cream spread, Lino baby food with prebiotic and Lupocet Flu.
Podravka became first Croatian member of IBLF, International Business Leaders Forum.

Podravka Group Business Results For I-IX 2006