Diversification to make it easier for Kolektor to survive crisis
In an interview for the newspaper Delo published on Tuesday, Stojan Petrič said that the two industries currently brought adequate return on investment, while the automotive industry segment was shrinking significantly.
According to him, the group best known for producing commutators for electric motors has all its capacity in the energy segment sold for the entire 2020 and the first half of the next year.
The situation is similar in the construction segment, where additional projects have been secured in Croatia and production will run at full capacity this year and next, so no major problems are expected in this segment in the short run.
Petrič, who is also one of the main owners of Kolektor, meanwhile noted that the segment producing components for the automotive industry was expected to record a drop from EUR 340 million in sales last year to EUR 210 million this year.
"This is more than EUR 100 million. This will impact the operations of the group, this is a shock," he said, adding that if Kolektor operated only in the automotive industry, this would be a problem hard to solve.
"We were lucky to diversify to energy and construction, so it will be easier for us to survive than the competition dependent on car parts," Petrič told Delo.
A projection for the end of the year shows that the debt-to-EBITDA ratio will be under three, which is much better compared to competitors in the automotive industry, where this ratio is expected to stand between six and eight.
Petrič said that some adjustments needed to be made, including by utilising state subsidies for the automotive industry. It is unlikely that Kolektor shareholders will get dividends this year, while they could expect them next year.
Projects to relocate production from countries with high labour costs, for example Germany, to cheaper locations are also under way, he said, adding that the group would try not to cut the number of jobs but some adjustments had to be made.
A part of employees from Idrija will be reassigned to the energy equipment maker Kolektor Etra in Ljubljana, which needs an additional 40-50 workers if it wants to catch up with all orders.
"When things get back to normal, we will look for new opportunities. We will make reassignments within the group. This is how we will be saving jobs in Slovenia," Petrič added.
Kolektor will continue to go international by building locations in Europe and South Korea, developing the energy and construction segments, as well as the car parts segments, where it needs to specialise further, he concluded.