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Oct 22, 2007 14:12 EEST
(adds details, group’s restructuring plans)</p>SOFIA
October 22 (SeeNews) - Bulgarian industrial group Synergon Holding expects its net profit this year to be the same as its last year's earnings of 14.8 million levs and plans to list two of its units, the company said on Monday.
Synergon Holding said on Friday it has sold has sold 95.12% of its electrodes manufacturer Electrodes to UK welding materials producer ESAB, for 6.8 million euro ($9.7 million).
“The sale of Electrodes as part of the restructuring of the holding company will have a positive impact on the financial results and they will not differ from last year’s result,” Synergon Holding executive director Marin Stoianov told a news conference.
The company will use proceeds from the sale of Electrodes mainly for investments in its building materials business, Synergon Holding's supervisory board chairman, Bedo Doganyan, told the same news conference.
The construction sector in Bulgaria, a country of 7.7 million people that joined the EU in January, has been steadily growing over the past few years and is expect to sustain its fast growth in anticipation of yields rising after EU accession.
Synergon will spend some 5.0 miilion levs to increase the output of its concrete roof tiles factory Balkanceramic by adding new concrete products like paving and kerb stones. It also plans to build a new unit for the production of bricks at Balkanceramic, Doganyan added.
Synergon will invest 23 million levs in its building materials business next year, up from 2.5 million levs allocated for the purpose this year.
The holding company plans to invest a total of 38 million levs next year, little changed from the money earmarked for investments in the current year.
PORTFOLIO RESTRUCTURING, NEW LISTINGS
Synergon will also restructure its fuel and building materials retailer Toplivo, the most valuable asset within the group, aiming to increase the share of its sales to construction companies.
Toplivo, whose shares are included in the blue-chip SOFIX index of the Sofia bourse, has more than 200 retail units across Bulgaria.
From the beginning of next year the company will start to concentrate its activities in the units with the highest turnover and restructure the activities of the remaining outlets, Toplivo executive director Shtiliyan Stoyanov told the same news conference.
Shares in Toplivo rose 0.1% to 34.99 levs on Monday.
As part of the reshuffle within the group, Synergon will also make public two of its units, hotel operator Synergon Hotels and paint maker Lakprom.
“We hope we will prepare the two companies for listing in the next five to six months,” Doganyan said, adding that most likely the two units will increase their capital via initial public offerings to raise funds for their growth.
Doganyan said that Synergon Hotels, which runs the Novotel hotel in the second largest Bulgarian city of Plovdiv, is in talks to acquire two city hotels. The group will also invest some 5.0 million levs by the end of the year in its furniture production business.
Synergon Holding is majority owner of 25 companies and holds minority stakes in another three firms.
Shares in Synergon, part of BG 40 tracking the 40 most liquid stocks on the Bulgarian Stock Exchange, closed 2.0% higher at 16.50 levs ($12.08/8.46 euro) on Monday.
(1 euro = 1.95583 Bulgarian levs)
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