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CONTED SA - CNTE

Preliminary financial results at 31st of December 2017

Release Date: 2/15/2018 8:07:49 AM

IRIS Code: 4654F

 

Current report

According to the regulation C.N.V.M. no. 1/2006

 

Date of report: 15.02.2018

Name of the company: S.C. CONTED S.A.

Head office: Dorohoi, 1 Decembrie Street, No. 8, Botosani County

Number in the trade registry: J07/107/1991

Tax identification number: RO 622445

Share capital subscribed: 2,284,360.06 RON

Trade Market: B.V.B. standard category

 

Important events to report:  Preliminary financial results at 31st of December 2017

 

The company presents the main indicators achieved in 2017 according to the International Standards of Financial Report. The currency for financial reporting is leu.

The situation of the financial position, the situation of the profit or the loss and other elements of the global result, components of the individual financial situations ended at 31st of December 2017 comprise information from the accounting records corresponding to the end of the financial year of reporting and the end of the financial year previous to the one of reporting.

From the analysis of the presented elements compared to the same period of time of the previous year 2016 are seen the following situations:

From the situation of the financial position it was seen a decrease of the fixed assets with 7.94% and the current assets with 12.20%. The balance of the debts in total assets was only 14.47%, minimum level in the last 2 years, and in this period of time, the own capitals oscillated between 83.79% and 85.53% from the total of assets.

The company’s turnover afferent to 2017 is of 13,894,359 lei from which 6,592,637 lei export and 7,301,722 lei internal, compared to 2016 when we recorded 16,890,499 lei, from which 7,635,249 lei export and 9,255,250 lei internal. In its structure, the turnover was achieved mainly by the sale of own production in a proportion of 98%. The value of the export sales in 2017 represents 47%, and the value of the internal sales represent 53% from the turnover. The recorded turnover of 2017 to the amount of 13,894,359 lei has decreased by a 17.74%, as against 2016.

The volume of total income achieved was to the amount of 14,564,831 lei, representing an decrease by 10.06% as against the total income obtained in 2016 to the amount of 16,194,137 lei.

The volume of total expenses to the amount of 15,281,314 lei has decreased by 3.95%, compared to 2016, when we recorded the amount of 15,910,386 lei. In the volume of total expenses, the staff expenses have the highest percentage of 79.20%. The staff expenses to the amount of 12,103,070 lei, have decreased by 3.52%, compared to 2016 when they recorded the amount of 12,544,148 lei, representing 87.11% from the turnover.

The exploitation income to the amount of 14,505,795 lei has decreased in 2017 by 10.19%, compared to 2016 when they recorded the amount of 16,151,139 lei as well as the exploitation expenses, to the amount of 15,235,095 lei have decreased by 3.75%, compared to 2016 when they recorded the amount of 15,828,400 lei.

In the total of the exploitation income, the sold production has the highest percentage, and from the exploitation expenses, the staff expenses has the highest percentage, to the amount of 12,103,070 lei, representing 79.44% from the total of the exploitation expenses.

The exploitation activity was concluded with a loss to the amount of (729,300) lei, as against 2016 when we have recorded a profit to the amount of 322.739 lei.

The financial income to the amount of 59,036 lei comes from interests and exchange differences. The financial expenses to the amount of 46,219 lei come from other financial expenses (unfavorable exchange differences). The financial result is a profit to the amount of 12,817 lei as against the same period of 2016 when we recorded loss to the amount of 38,988 lei.

In 2017, S.C. Conted SA recorded losses of (716,483) lei, compared to previous year, when we recorded a gross profit to the amount of 283,751 lei.

These losses were caused by a number of unfavorable factors.

The most important aspect was the decrease in operating revenues by 10.19% compared to 2016.

This decrease was caused by the following factors:

            - the diminishing of the number of directly productive employees by 15.78%;

- the decrease of prices to our main customers by 14%;

- the extending of the interseason period from 8 weeks to 14 weeks;

- the constant non-feeding of the production lines.

Due to the high fixed costs, the decrease in the number of directly productive employees led to an increase in unit cost and thus a decrease in the volume of orders. At the same time, the decrease in the number of directly productive employees led to a decrease of 12 - 14% of the volume of production achieved.

In addition, the decrease in the number of directly productive employees has led to an acute shortage of staff in production lines, drastically decreasing the production, due to the incomplete lines. The lack of direct productive staff forced us to dismantle a production line to cover the shortcomings on the other lines with the staff of the dismantled line. However, the change of the working place led to the more cumbersome adaptation of the relocated personnel and thus the reduction of the productivity of the line .

The loss of employees was due to several reasons:

- the completion of the retirement age both at the retirement age and early retirement age;

- the competition on the labor market;

- very serious disciplinary misconducts that led to the dismissal of the respective employees;

- the dismissal of employees for reasons not imputable to the company.

The very high competition on the international markets where our customers operate has led to a drastic drop in production prices and thus in the cashings.

There were attempts to keep prices at the same level, but only some customers accepted it, which led to the lack of orders in large quantities. Receiving small orders led to a fall in labor productivity and thus to a decrease in monthly earnings.

In 2017, the interseason period, in which our customers did not have orders or had few and poorly paid orders, increased substantially from 8 weeks, as it was in 2016 to 14 weeks. This led to an acute shortage of orders in March, April, May and October, and thus a drastic decrease in revenues.

Since the end of 2016, our customers have begun to experience difficulties with the supply of raw and auxiliary materials, which has led to shortages in line feeds and production gaps. All these gaps have generated losses that could not be recovered.

Another important aspect was the increase in production costs. This was due to the following factors:

- 16% increase in the minimum wage in economy in 2017 compared to 2016;

- a 47% increase in the provision for employee benefits on unpaid leave for 2017 compared to 2016.

 - a 130% increase in local taxes and duties in 2017 as compared to 2016.

- the increase of 14.12% in the number of sick days paid by the company, from 2,861 days (176,128 lei in 2016) to 3,265 days (237,222 lei). In money, the increase was of 34,69%.

The staff expenses  represents 79.20% of the company's total expenses. The 16% increase in the minimum wage led to an increase in total expenses of 12.67%. It was decided the measure to cancel the meal vouchers in order to partially diminish the increase in expenses, but it was not enough covering.

Due to the mandatory revaluation of buildings, the value of buildings has increased and so local taxes have increased by 130%. The increase in the price of energy has led to an increase in the cost of production.

In 2017 there were made indicators of budget revenue and expenditure.

At the end of 2017, the cash flow was a negative growth of net cash amount of 1,168,013 lei, reflected in the balance of accounts at banks and house. On 31.12.2017, a decrease of the average number of employees was registered, compared to the same period of 2016 year, from 464 to 398 employees.

The financial situations were drawn up according to the:

·         Order 881 from 25th of June 2012 related the application by the trade companies of securities are admitted for trading on a regulated market of the International Standards of Financial Reporting;

·         The International Standards of Financial Reporting (IFRS) adopted by the European Union

·         The Law 82 from 24th of December 1991 of the accountancy republished and updated;

·         The Order 2844 from 12th of December 2016 for the acceptance of the bookkeeping regulations according to the  International Standards of Financial Reporting, applicable to the trade companies of which movable values are admitted for trading on a regulated market;

The financial situations were approved by the Administration Board in the meeting from 24th of January 2018.

We mention that the preliminary financial statements are not audited and can be modified according to the eventual bookkeeping and tax regulations that can occur in the following period of time until the General Assembly of the Shareholders.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRELIMINARY STATEMENT OF FINANCIAL POSITION

 

 

 

                31.12.2017

             31.12.2016

 

Assets

 

 

 

Tangible assets

 5,092,263

5,523,847

 

Intangible assets

21,298

38,082

 

Real estate investments

119,512

122,610

 

Total Non-current Assets

5,233,073

5,684,539

 

Inventories

1,850,045

1,571,167

 

Trade receivables and other receivables

2,504,831

2,452,744

 

Prepayments

15,736

11,576

 

Cash and cash equivalents

1,622,539

2,790,552

 

Total Current Assets

5,993,151

6,826,039

 

Total Assets

11,226,224

12,510,578

 

Equity

 

 

 

Share capital subscribed

2,284,360

2,284,360

 

Other items of equity

(256,827)

(287,858)

 

Revaluation reserve

2,276,601

2,470,543

 

Legal reserve

456,661

456,661

 

Other reserves

4,080,948

4,080,948

 

Retained earnings

1,476,415

1,282,473

 

Year result

(716,483)

195,545

 

Total Equity

9,601,675

10,482,672

 

Payables

 

 

 

Long Term Payables

 

 

 

Payables regarding the deferred income tax

256,827

287,858

 

Total Long Term Payables

256,827

287,858

 

Current Payables

 

 

 

Trade payables and other payables

989,917

1,482,963

 

Provisions for employee benefits

377,805

257,085

 

Total Current Payables

1,367,722

1,740,048

 

Total Payables

1,624,549

2,027,906

 

Total Equity and Payables

11,226,224

12,510,578

 

 

 

             

 

 

 

 

PRELIMINARY STATEMENT OF PROFIT OR LOSS AND OTHER ITEMS OF THE GLOBAL RESULT   

Continuos activities

                         31.12.2017

         31.12.2016

Incomes

13,894,359

16,890,499

Other incomes

106,831

82,209

Incomes corresponding to the product inventory costs

504,605

(821,569)

Total Operational incomes

14,505,795

16,151,139

Expenses with raw materials and consumables

912,541

876,259

Expenses with merchandise

204,480

227,213

Expenses with facilities

919,231

1,071,584

Expenses with salaries, social securities and other benefits

12,103,070

12,544,148

Expenses with amortization

454,617

326,831

Adjustments for provisions

120,720

257,085

       - Expenses

373,164

257,085

       - Incomes

(252,444)

-

 Other expenses

520,436

525,280

 Total Operational expenses

15,235,095

15,828,400

 Operational  activities result

(729,300)

322,739

 Financial incomes

59,036

42,998

 Financial expenses

46,219

81,986

 Financial result

12,817

(38,988)

 Result before taxation

(716,483)

283,751

 Expense with the current income tax

-

84,602

 Expenses with the deferred income tax

-

3,604

 Result continuous activities

(716,483)

195,545

 Other items of the global result                                            

31,031

1,268,132

 - Deferred income tax recognized in equity account, for the surplus realized from the revaluation reserve to the extent amortized using the asset transferred to retained earnings

       31,031

      3,480

  - Deferred income tax recognized in equity account for the increase in the revaluation reserve of property, plant ,,construction” and ,, investment property”

                     -

        (237,085)

   - Increasing reserve from revaluation of property, plant   ,,construction” and the ,, investment property”

                       -

         1,481,781

  - Retained earnings from correction of accounting errors

                       -

             19,956

Total global result related to the term

           (685,452)

          1,463,677

Attributable profit

                       -

           195,545

Result per basic action

                       -

                 0.81

Result per diluted action

                       -

                 0.81

   

            

                                Chairman of the Board of Directors,                                              Chief Economic Office,

                                      Eng. POPA MANOLE                                                                     EC. Mihai Elena

 



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