The Slovenia Times

Gorenje reports net profit of EUR 8m in 2016


Gorenje increased the sales of premium and innovative appliances, which accounted for 27.4% of the sales of big household appliances. The sale of small household appliances was also up, by 33%.

The group strengthened its position and sales in Russia, Ukraine and Eastern Europe, Benelux, Australia, the US and Asia.

Investments in marketing and development were also up to EUR 31m.

By renegotiating terms with suppliers and optimising the costs of material and logistics, the group significantly increased earnings before interest, tax, depreciation and amortization (EBITDA).

EBITDA is estimated to reach EUR 87m, which is 8.6% more than in 2015, the company said.

The group's relative indebtedness continued to decrease, bringing the ratio between net financial debt and EBITDA down to 3.9.

In line with its strategy to focus on the core activity, Gorenje sold its shares in waste management company Publicus and its subsidiary Ecogor.

The group expects sales revenue to continue growing this year, increasing by 4.6%. It also plans to boost its sales in Russia, Ukraine, Eastern Europe, Benelux, Germany, Scandinavia, the Middle East, Asia, the US and Australia.

"We will continue to generate positive money flow, optimise net current assets and reduce complexity on all levels," the company wrote.

Efforts will continue to reduce the net relative indebtedness and bring the ratio between net financial debt and EBITDA further down to 3.5.

EBITDA is planned to go up by 11%, while net profit is to top EUR 13m.

Gorenje plans its fifth issue of commercial papers this year in the nominal value of up to EUR 40m. The purpose of the issue is to disperse the sources of short-term financing and optimise the costs of financing.

The supervisory board also got acquainted today with the planned changes in the organisation of the group, envisaging a transition from a classical functional model to a model focusing on brands and products.

Gorenje management thinks this will help achieve the group's strategic goals of global growth until 2020.


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