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Gorenje expects 40 mln euro loss in 2019, 30 mln euro profit in 2020 - report

Author Iskra Pavlova
Gorenje expects 40 mln euro loss in 2019, 30 mln euro profit in 2020  - report Source:

LJUBLJANA (Slovenia), December 10 (SeeNews) - Slovenian white goods manufacturer Gorenje [LJE:GRVG] controlled by China's Hisense Group expects to post a 40 million euro ($44 million) loss this year before swinging to a 30 million euro profit in 2020, local media reported.

Gorenje has already reported a consolidated net loss of 29.5 million euro for the first half of 2019. Its consolidated net loss widened to 37.3 million euro last year from a loss of 4.3 million euro in 2017.

The main challenge for the company in the coming period is to improve the efficiency of its production processes, which is lagging behind that of its rivals, news wire quoted members of Gorenje's management as telling reporters on Monday.

Therefore, the company's focus in the next three to six months will be to carry out a reorganisation process and once it is successfully completed, the announced construction of a new manufacturing plant for TV sets in Velenje will begin.

The reorganisation will include the relocation of Gorenje's administration unit from its current base in Velenje to the capital Ljubljana, where in the coming year the unit will start operating under the name Hisense Gorenje Europe Service, said.

In October, Gorenje said that Hisense Group will establish a unit in Ljubljana to provide corporate support services for all Hisense companies in Europe, as part of the group’s strategy to integrate activities with Gorenje. The final steps of the integration include separation of Gorenje's manufacturing part from the administrative part of the company, establishment of shared regional service centres, and merging of international sales units.

Thus, Hisense will make Slovenia the headquarters for managing all of its European operations, while the company Gorenje d.o.o. will only comprise the manufacturing activities.

In October 2018, Hisense Luxembourg Home Appliance Holding, a member of China's Hisense Group, acquired 998,417 Gorenje shares at a price of 12 euro per share and now holds a 95.42% stake in Gorenje.

In March, Gorenje said it plans to build a factory for manufacturing Hisense brand TV sets in Velenje, with the first stage of construction expected to be completed next autumn with the plant initially manufacturing some one million units per year. In the next stage, the company is planning to increase the output capacity to 4 million TV sets per by 2023.

($=0.902654 euro)