LJUBLJANA (Slovenia), November 6 (SeeNews) – Slovenian rubber-to-tourism holding company Sava said on Friday its consolidated unaudited net profit fell to 10.6 million euro ($16 million) in the first nine months of 2009 from 29.7 million euro a year ago.
The earnings performance over the review period beat the initial forecast due to efficient cost management and the introduction of innovative marketing approaches, the group said in a filing with the Ljubljana Stock Exchange (LJSE).
Group sales fell 12% on the year to 134.5 million euro through September and were 17% short of the initial plan.
"All key divisions of the Sava Group ended this nine-month period with a positive result as they compensated a decreased sales volume resulting from a declined demand, with adapting their costs to the changed volume of operation," the group said.
"This year the economic situation for the Group divisions was harsher than anticipated and was demonstrated in a decreased demand in all important markets. The negative impacts of the global financial crisis in the form of the aggravated access to long-term financing sources and pressures on the price of money affected the result of the Sava Group."
The group said it cut its nine-month operating expenses by an annual 29% to 126.7 million euro due to short-term anti-crisis measures, one of them being improved cost efficiency.
Sales of the group's rubber division were down by 26% on the year in January-September. The tourism division posted a 9.0% year-on-year fall, while sales at the group's real estate business were higher on the year, the group said but did not elaborate.
"According to our estimates, Sava Group companies will end the year 2009 more successful than last year. The expected deviations in sales of certain divisions will be compensated through cost rationalisations and revenues from other divisions," the group said.
Compared to the end of 2008, the number of employees was cut by 285 to 2,592 at the end of September as fixed work contracts were not renewed and certain services were outsourced.
The investment in the Sava Group companies in the first nine months totalled 3.9 million euro, which were primarily earmarked for improvements in production facilities in rubber manufacturing and modernisation of the hotel Izvir in Radenci, the statement said.
The Sava Group includes 31 companies: the parent company Sava, 28 subsidiary companies and two joint ventures.
Sava shares, part of the LJSE's blue-chip SBITOP index, closed up 1.91% at an average price of 209.26 euro on Friday.
($=0.6712 euro)