Lower revenues were chiefly the result of harsh economic conditions in Europe, where the Velenje-based home appliance maker generates 90% of its revenues.

Also pushing down revenues compared to the same quarter in 2011 is the sale of energy group Istrabenz Gorenje, the company wrote in a press release posted on the website of the Ljubljana Stock Exchange.

Group sales dropped in Netherlands, Benelux, Ukraine, France, and Slovenia, while rising in Russia, Germany, USA, Australia, Serbia, and Czech Republic.

Despite the lower sales revenue, Gorenje improved its profitability. Operating profit (EBIT) at EUR 9.2m is 15% higher than in the same period last year, with the EBIT margin standing at 3.1%.

The growth in EBIT is a result of increased sales in Russia and some other markets of eastern and SE Europe, where operating profitability is higher, as well as activities to control all types of costs, the company said.

Gorenje CEO Franjo Bobinac stressed it was good to see an improvement in the profitability of operations despite the drop in sales.

He said that the group is focusing on boosting sales with new products in key markets, such as eastern Europe, SE Europe, northern Europe and overseas countries.