Business results of the Podravka Group for 2003

At yesterday’s meeting, the Supervisory Board of Podravka approved the revised financial reports on the business operations of the Podravka Group in 2003.

The Podravka Group achieved total income to the amount of HRK 3,321.9 million, representing an increase of 15% compared to 2002. Revenues from sales in 2003 amounted to HRK 3,217.7 million and are 17% higher than those in the previous year. A 15% growth was achieved on the Croatian market over the previous year, with sales reaching HRK 1,748.2 million, while foreign sales were 20% higher than in 2002, amounting to HRK 1,469.5 million.

In 2003, the Podravka Group recorded a net profit of HRK 10 million. This profit was smaller than last year’s, but still represents a positive shift when compared to the first six months of the same year. In the second half of last year, the Podravka Group achieved a net profit of approximately HRK 39 million, and without the costs of redundancies, the net profit would have been about HRK 63 million, since the one-off cost of these redundancies in the second half of the year amounted to HRK 24 million.

The largest individual growth in sales was achieved in the beverages segment – Studenac and Studena brands – with 39% higher sales than the previous year. Growth in sales was also recorded in other segments, such as Lino, Kviki, and Dolcela, which grew by 6% compared to 2002. The Fruit and Vegetables segment achieved a 6% growth, while Mill and Bakery products had a 5% growth. Podravka Foods (soups, ready-to-cook meals, etc.) recorded a 2% growth, and Podravka Meats a 6% growth over the previous year. Growth was also achieved in Pharmaceuticals (4%), while sales of Vegeta decreased in comparison with the previous year. The increase in the sales of commercial goods is due to the sales of Nestle products, as well as goods produced by Kraša, Adria and Heinz.

The markets of Central Europe (the Czech Republic, Slovakia and Hungary) recorded a 63% growth over 2002, which is partially the result of sales by acquired companies. A 15% growth in sales was recorded in the Croatian market, while in the markets of Southeast Europe the growth in sales amounted to 35%. A growth of 12% was also recorded in the markets of Eastern Europe. In the markets of Poland and the Baltic States sales were lower than those of last year. In the second half of the previous year, sales in the market of Poland stabilised. However, the unfavourable results of the first part of the year could not be compensated for. In the markets of Western Europe, Scandinavia and overseas countries, sales grew by 10%.

A new plant of Podravka Foods was opened in 2003, and the investment cycle was continued. Investments were also made in the development of the business information system (the integration of investments and property management into SAP; the optimisation of controlling; the introduction of Cash Management and Business Warehouse; the integration of Ital-Ice, the new Podravka Foods plant, the central warehouse and the Podravka companies in Podgorica and Belgrade into SAP; the introduction of B2B in Poland and Slovenia), Podravka established its own Academy of Management, POMAK, continued the programme of issuing commercial papers, and made preparations for issuing Podravka corporate bonds.