During the first six months of 2005 the Podravka Group realised total revenues of HRK 1.64 billion, a 1% increase compared to earnings for the same period in 2004. With regard to the structure of total revenues, 97% represented sales revenues, while 3% was other income. The Podravka Group created a net profit of HRK 47.5 million in the first half of this year. Total expenses for the first six months of 2005, amounting to HRK 1,588.2 million, were at the same level as in the previous year.

Changes in internal accounting policies had a considerable impact on the Group’s financial statements for the period from January to June 2005, as did changes in the International Financial Reporting Standards (IFRS) which are used in presenting the half-year results.

Sales revenues amounted to HRK 1.59 billion, which was 1% higher than in the same period of the previous year. Revenues of HRK 851.7 million were achieved on the domestic market, representing a 3% increase over last year. On foreign markets, revenues amounted to HRK 738.2 million, with foreign sales representing 46.4% of total earnings. Sales were 4% higher on the Southeast European market and 3% higher in Eastern Europe, while in Western Europe they remained at the previous year’s level of HRK 95 million. A 10% decrease in sales was recorded on the Central European market. The Czech market had the largest impact on this decline in sales, with the largest decrease observed in the categories of rice, legumes and other products. This decrease in sales on the Czech market amounted to 22%, and resulted from the withdrawal of large amounts of goods by buyers due to expectations that prices would rise upon the Czech Republic’s entry into the EU.

Sales of products in the food and beverage segments grew by 2% during the first half of this year, while pharmaceuticals recorded a 3% decrease. Considered in terms of product groups, the most significant sales growth was shown by meat and meat products (21%). This was followed by Podravka Dishes (8%), commercial goods (8%) and beverages (7%). A noticeable decrease was recorded in the rice and legumes category, namely, 18%.

Besides this, Podravka’s business activities during the first half year were also marked by Euromoney’s award for business excellence, the appointment of a new Management Board, and Russia’s Superbrand award for Podravka’s most important brand, Vegeta.