Halcor Group of companies announced its Q1 2008 consolidated financial results according to the International Financial Reporting Standards (IFRS).
Consolidated turnover reached in Q1 2008 euro 315.2 mln. versus euro 327.8 mln. in Q1 2007, decreased by 3.9%. This decrease is attributed to the decrease in volume of sales by 1%, as well as to the change in the product mix, as in the first quarter of the current year the proportion of brass products to the total sales was increased.
Average copper price in Q1 2008, in euro terms increased by 14% standing at 5,179 euro per tone versus 4,529 euro per tone in Q1 2007. In contrary, average zinc price decreased by 39% and stood at 1,620 euro per tone versus 2,640 euro per tone in Q1 2007. With respect to volume, in Q1 2008 cable products accounted for 35% of total sales, tubes for 28%, rolled products for 16%, brass rods for 14% and copper bus bars for 7%.
The international conditions have affected significantly volume of sales for the Group, since the continuously high copper prices in conjunction with the drop in construction activity both in the domestic as well as in large European markets, has had an impact in demand for installation products, especially for the rolling copper products for roofing.
It is important to note the fact that in the 1st quarter of 2007, there had been high demand for copper products stemming from the increased construction activity as a result of the mild winter in all of Western Europe and Russia, a fact that was not repeated this year.
The drop in demand for installation products has intensified competition, which in turn has caused a drop in fabrication prices. In contrast, production cost has risen due to the continuously increasing oil prices, while wildcat strikes in the county΄s main ports have had an adverse effect in both quantities and the cost of exports and raw material imports. Moreover, the combination of metal price fluctuations, a high backwardation emerging early in the year and the delays in receiving large scrap quantities from the international markets resulted to the lack of positive metal results for the first quarter for the Group.
Production cost has been negatively affected in the short run from the operational pilot testing of large investments in the areas of tubes, rolling products and cables, which are going to produce benefits gradually.
Consolidated gross profit decreased by 32.4% to euro 21.1 mln. versus euro 31.2 mln. in Q1 2007. Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) reached in Q1 2008 euro 16.3 mln. versus euro 27.8 mln. in the respective period last year decreased by 41.6%, while earnings before interest and tax (ΕΒΙΤ) decreased by 53.0% decline to euro 10.3 mln.
Consolidated earnings before tax (EBT) marked a 79.2% decrease to euro 3.4 mln. in Q1 2008 versus euro 16.4 mln. in Q1 2007 affected by the increased financial expenses due to higher inter-banks interest rates. Finally, net earnings after taxes and minorities marked a 91.8% decrease to 953 thou. euro or 0.009 euro per share.
Regarding the whole of the fiscal year 2008, it is expected to be marked by the substitution of certain product categories, a situation that has intensified from the second half of the previous year and is expected to be sustained for as long as copper prices remain at high levels. HALCOR Group pursuant to its strategic plan which is based on the pillars of developing high value added products least susceptible to substitution effects and its expansion into new markets, intensifies its efforts for increase of both sales and results.
The Q1 2008 Data and Information and the Financial Statements are being published on Friday, May 23, 2008 in the daily press and are posted on the company's website at the address www.halcor.gr