Gorenje Results Are "On-Target" for 2006
Nov 7, 2006
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Slovenia-based appliance maker Gorenje said it performed well and on-target in the first 9 months of 2006. The company credited high sales volume, innovative products and cost control as key to success in the face of extremely tough conditions in supply and sales markets.

Gorenje Group had net revenue from sales in the amount of 184,713.2 million Slovenia Tolars (SIT) (approx. U.S. $987 million), which is 4.2 percent higher than the same period last year, reaching 75.7 percent of the plan for 2006.

Using comparable data, the company said net revenue from sales is higher by SIT 13,680.2 million (approx. $73 million), which is equivalent to 8.0 percent. Net revenue from sales in the first 9 months of 2006 is not entirely comparable with the figure reported for the same period in the preceding year due to the divestment of the Hyundai companies in July 2005.

Consolidated net profit in the amount of SIT 3,092.3 million (approx. $16.5 million) is up 1.5 percent over 2005, reaching 58.3 percent of the plan for the current year.

Parent company Gorenje d.d. had net revenue from sales in the amount of SIT 120,874.4 million (approx. $646 million), or 10.3 percent higher than 2005 and reaching 71.7 percent of the plan for 2006. Net revenue from sales is not entirely comparable to the same period in the previous year and the annual plan due to the amalgamation of the subsidiary company Gorenje Indop d.o.o. Net profit for the period amounts to SIT 1,011.0 million (approx. $5.4 million), up 7.8 percent over 2005, and 41.2 percent of the planned annual net profit.

Gorenje said it is operating in a tough business environment characterized by sky-high commodity prices. In the mature household appliances industry, it said, supply exceeds demand and Gorenje’s strategy to grab more market share was based primarily on the sophisticated design and innovation of its products.

Gorenje said in a release that "even continuous development and state-of-the-art improvements in terms of engineering, technology and functional design in this oversupplied industry are not enough."

Gorenje has also been maintaining competitiveness by improving productivity and efficiency. Efforts include: high volumes of business activity, supply chain optimization, rationalization of business processes, and cost control at all levels.

The company’s strategic plan for now through 2010 is to maintain production capacities in Slovenia at the present level with growth to be generated abroad.

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