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Nov 05, 2007 14:18 EEST
November 5 (SeeNews) - Bulgarian metals group Intertrust expects to close the year with a 30 million euro ($43.4 million) operating profit, and plans investments of up to 270 million euro in the next three or three and a half years, the group's chief executive officer said.
“The profit is due to upgrades, improving trade sentiment and management, and restructuring,” the group’s CEO Roberto Mladenov told SeeNews in a recent interview.
The group posted a 61.4 million levs ($45.5 million/31.4 million euro) pre-tax profit for the first nine months of the year.
“The [full-year] net profit will be considerably higher,” Mladenov said but provided no figures. Last year, the group posted a net profit of some 20 million euro.
Intertrust, which operates in mining, metallurgy, machine building, retail, transport and tourism, sees its full-year sales revenue at some 300 million euro, up from last year’s 250 million euro.
“Sales revenue next year will mainly depend on the market price of the commodities we trade with - lead, zink, iron, steel,” Mladenov said.
In Bulgaria the group owns lead and zinc smelter OTZK, steel tubes manufacturer Inter Pipe, lead and zinc miner Gorubso Madan, lead and zinc concentrates producer Gorubso ROF, machine builder Fintechmash, lead and zink mines. It also owns Macedonian vegetable producer Interagro and Serbian pre-painted galvanised (PPG) steel sheet and sandwich panels producer Interlemind, machine buidling company Fam and metal forging plant Zastava Kovacnica.
Intertrust plans to invest between 250 million and 270 million euro in the next three or three and a half years. A small part of the money has already been invested, Mladenov said.
Earlier this week, the company opened a sandwich panel unit worth over 10 million euro at its Interlemind plant in the southern city of Leskovac in neighbouring Serbia. Intertrust bought Interlemind last year and pledged to invest some 1.0 million euro in it.
The new unit will have an annual capacity of 2.5 million tonnes of sandwich panels, calculated on the basis of the most widespread panel of 0.33 centimetres. The panels will be marketed in the local, European and the market of the former Yugoslav countries.
“The price [of the sandwich panels] is some 18-19 euro per square metre,” Mladenov said.
The annual demand for sandwich panels in the former Yugoslav countries – Serbia, including the southern province of Kosovo, administered by the United Nations, Montenegro, Bosnia and Herzegovina, Croatia and Slovenia is three times higher than Interlemind's capacity, Mladenov said.
“We have already received orders for 200,000 square metres of sandwich panels,” he added.
The other unit of the Interlemind factory manufactures pre-painted galvanised (PPG) steel sheets, which are sold in the Serbian, Turkish and European Union markets.
Intertrust's investments in another Serbian unit, Fam, will also exceed by far the amount the company has pledged to invest, Mladenov said.
Last month, the group bought the state-owned machine manufacturer Fam for some 867,000 euro and pledged investments worth 270,000 euro. The investments will be in boosting the plant's capacity and buying new machines, Mladenov added.
"I think that all our machine building units – Fintechmash, Zastava and Fam - have a bright future together.”
For their greater part, the remainder of the planned investments will go to raise the capacity of the lead and zinc smelter OTZK and steel tubes manufacturer Inter Pipe. The latter is investing some 94 million euro in opening a new unit for hot rolled coils and cold rolled coils and a small steel smelting furnace. Inter Pipe has other investment plans, too, Mladenov said but provided no particular details.
“We are also investing over 120 million euro in OTZK,” he said.
OTZK, which is the only Intertrust unit traded on the stock exchange in Sofia, plans to raise zinc output capacity to some 45,000 tonnes yearly from the current 27,000 tonnes. It will also raise by 60% its lead output which currently stays at 15,000 tonnes a year.
“The investments in the zinc unit have already been launched. The ones in lead are forthcoming,” said Mladenov.
OTZK more than doubled its profit through September, reaching some 11.3 million euro. The smelter produced 9,611 tonnes of lead in the first nine months of the current year, compared to 8,045 tonnes a year earlier. It also produced 20,288 tonnes of zinc for the first nine months of the year, up 8.7% on the year.
Intertrust also intends to take part in the tenders for the privatisation of four metal casting units of Serbia’s Min Holding, of which Fam used to be part, Mladenov added. The tenders, initially scheduled for the end of last month, have been postponed until the end of this month.
“We have also expressed interest in operating under concession agreements several non-operation mines [in Bulgaria]. Unfortunately, the state is taking too long,” he said and added that the group has also interests in mines in Serbia and Kosovo.
The group also plans to list its subsidiaries Fintehmash, Gorubso Madan, Gorubso ROF and Inter Pipe on the Bulgarian Stock Exchange (BSE) next year. Prior to the listing, it will merge Gorubso Madan and Gorubso ROF.
A rising number of Bulgarian companies have announced plans to go public as financing through the stock exchange in Sofia has become easier after an influx of foreign funds following the country’s EU accession in January.
Intertrust is 89.98% owned by the former chief executive and main shareholder of Bulgaria's largest steel mill Kremikovtzi, Valentin Zahariev.
($ = 0.6911 euro)
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