Gorenje's Operating Results for the First Quarter
Jun 6, 2011
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Appliance maker Gorenje Group (Velenje, Slovenia) reported sales revenue of EUR 370.2 million in the first three months of 2011, up 27.2% from the first quarter of 2010. This includes sales from Swedish appliance company Asko, which Gorenje acquired in mid-2010. Sales for the first quarter of 2011 without including Asko were EUR 332.9 million, compared to EUR 291.0 million in 1Q 2010.

Russia and Ukraine were the best performing markets for Gorenje during this period. The company noted that its operation, and the appliance industry as a whole, were challenged by escalating raw materials prices.

Gorenje's largest division is appliances. Gorenje saw a nearly 1% slowdown in its white goods markets by sales volume, but Gorenje itself increased units sales by 3.2%. Sales revenues were fueled by higher sales volume and improved composition of sales by regions and products in Russia and Ukraine, Germany, Belgium, Greece, Slovakia, Hungary, and the Middle East. Growth rates in other markets were the same or similar to that of the last year's first quarter.

Gorenje's smaller home Interior division saw a 7.7% drop in sales revenues relative compared to 1Q 2011. The company blamed harsh conditions in the furniture industry and planned decreases in deliveries to customers with financial problems. The division is currently in the process of restructuring, and contributed just 2% of Gorenje Group's total consolidated sales revenues.

The Ecology, Energy and Services division contributing 32% of the group's total revenues, boosting sales by nearly 43% in 1Q 2011 compared to 1Q 2010.

Gorenje's net profit for the first quarter of 2011 was nearly EUR 1.9 million. Adjusting for the effects of Asko, net profit amounted to EUR 4.5 million.

"Circumstances in downstream markets are still highly unpredictable and strongly affected by rampant unemployment and budget deficits in most countries," said Franjo Bobinac, Gorenje president and CEO. "Moreover, raw material prices again hit their historical highs, which afflicts the operations of all competitors in the industry. Gorenje is looking to counter these adverse trends by constant innovative development and introduction of new products and services in both existing and new markets."

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