January 12 (SeeNews) - Slovenian home appliances manufacturer Gorenje [LJE:GRVG] said on Friday it expects a consolidated net profit of 8.1 million euro ($9.8 million) in 2018, an increase of 6.9 million euro over 2017.
Consolidated revenues are expected to rise 1.6% year-on-year to 1.33 billion euro in 2018, while EBITDA is planned at 86 million euro, up 13% compared with the estimated figure for 2017, Gorenje said in a filing to the Ljubljana bourse.
Revenue generated by the Domestic Appliances segment will amount to 1.19 billion euro, which is 10.4% more than the estimate for 2017.
Breaking down by brands, the highest growth rate is expected with the premium brand Asko, for which sales are budgeted to increase by over 20% on account of Asia, Australia and Russia. Atag brand sales are budgeted to grow by 13%, while sales of Gorenje brand products are projected to rise by 8%.
"Within the European Union, our sales growth will be the steepest in Germany, Poland, Hungary, Slovenia and Croatia, while beyond the EU, we are planning the highest growth in the markets of Russia, Ukraine, Bosnia, Serbia, the Middle and Far East, Asia, and Thailand," Gorenje said.
It noted that in line with its strategic goal, 3.3% of revenue generated by the Domestic Appliances segment or 2.9% of the group's revenue will be invested into product development in 2018.
In 2017, Gorenje expects an end-year net profit of 1.2 million euro, indicating an 85.4% setback compared to 2016. Results were affected by negative market conditions, particularly by a rise in prices of raw and processed materials, which affected profitability especially in the second half of the year.
Revenue in 2017 is estimated at 1.31 billion euro, nearly 4.0% up on 2016. Revenue generated by the Domestic Appliances segment was recorded at 1.1 billion euro, a level comparable with 2016. Sales declined mostly on markets of Western Europe, particularly in Germany and Great Britain, in Poland and with certain industrial partners, hence revenue within this segment was lower than planned, Gorenje said.
Higher revenue was recorded on markets of Russia, Ukraine, Kazakhstan, Slovakia, Hungary, Bulgaria, Bosnia and Herzegovina, the Netherlands, the Near and Far East, Asia, America and Australia, which however has not entirely compensated for the lower sales volume recorded in Western Europe.
Gorenje's EBITDA totalled 76.3 million euro in 2017 and shows a decrease of 4.9% compared to 2016, while its EBIT suffered a decline of 34.6% to 21.7 million euro.
In 2018, Gorenje plans to have an average of 10,726 employees, which is 489 on average less than in 2017.
($=0.828291 euro)
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