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Gorenje Reports Harsh 3Q 2011
Nov 11, 2011
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Appliance maker Gorenje Group (Velenje, Slovenia) said its performance was hurt in the first nine months of 2011 by high prices of raw and processed materials and hesitant demand for home appliances in an uncertain economy. It said it will unveil a new strategic plan before the end of the year that may change the Gorenje product focus and will likely include changes to its manufacturing base.

Gorenje revenue in the first nine months of 2011 was 1.06 billion euros, up 9.8% from the first nine months of 2010. Sales were up at the Ecology, Energy, and Services Division as well as in the Home Appliance Division.

The Home Appliance Division did well in Scandinavia, Germany, Benelux, Russia, the United States, Australia, and the Middle and Far East. The Group's operating profit (EBIT) reached 23.4 million euros and net income (profit after taxes) amounted to 7.8 million euros.

Gorenje had a tough third quarter. In comparable terms - after adjusting for the effects of the Asko acquisition and Istrabenz Gorenje divestment - sales revenue was 0.7% below 3Q 2010.

Asko profitability was also down in the first nine months of 2011, but reached a positive result in the third quarter. Gorenje expects the negative effects of the Asko acquisition will be neutralized during 2012..
In the first nine months of the year, the Group made profit of EUR 7.8 million, which is lower than planned.

Gorenje expects the business environment to remain "hostile" in the coming years, which prompted it to compile a Strategic Plan covering the years until 2015. The plan will be unveiled on Dec. 20. and is intended to "lays down the path of stable growth" to achieve group revenue of 1.5 billion euros by 2015. The group will focus on strengthening its core activity - home appliance production - and increase its presence in markets outside Europe.

The plan will have Gorenje turning its focus more to higher value added products. It will also include cost rationalization measures, and Gorenje said that it will address "optimization of manufacturing sites."

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