Business results of the Podravka Group for the first six months of 2001

At its meeting today, the Supervisory Board of Podravka d.d. confirmed the business results of the Podravka Group for the first six months of 2001. The Podravka Group operated very successfully in this half year, achieving a net profit of 34.674 million kuna, which represents a 62% growth compared with the same period last year.

In the first six months of 2001, the Podravka Group recorded a total revenue of 1,314.4 million kuna, an increase of 8% over the same period last year. The largest share was recorded by the sales of products and services (93.2%), while the remainder was accounted for by financial and other revenues.
The sales revenue of the Podravka Group for the half year amounts to 1,224.9 million kuna, which represents a 5% growth over the same period last year. Of this amount, 674.8 million kuna were earned on the domestic market, that is, 55%, while 550.1 million kuna, that is, 45% of sales revenue for the first half year period of 2001, came from international markets.

In the structure of sales revenue for January to June 2001, the Vegeta programme dominates, amounting to 345.3 million kuna, representing a 16% growth compared to the first six months of 2000. A growth in sales for the same period was also recorded by Podravka Food (+9%), the dessert programme (+2%), drinks (+19%), fruit and vegetable products (+25%), mill and bakery products (+24%), pharmaceuticals (+4%) and traded goods (+30%). There was a noticeable drop in the sales of fresh and processed meat (-21% compared to January-June 2000), primarily as a consequence of cattle disease.

The sales of the Podravka Group in the first half year of 2001 on international markets grew by 14% compared to the same period last year, amounting to 550.1 million kuna. Sales in Poland, which account for more than 11% of total Group sales, increased by 35% compared to January-June 2000. There was also a significant growth in sales on the markets of Bosnia and Herzegovina (+20%), Slovenia (+3%), Russia (+78%), the Czech Republic (+27%), Macedonia (+6%), Germany (+14%), and Yugoslavia (+10%), etc.

On the domestic market, the Podravka Group recorded sales amounting to 674.8 million kuna, which is 1% less than in the first six months of 2000. In spite of the growth in sales of most of the programme, the declining sales of fresh and processed meat, primarily as a consequence of cattle disease, led to a decrease in revenue on the Croatian market.

During the first six months, the Podravka Group undertook a number of activities which have given the company solid foundations for further growth and development. At the beginning of the year, the management of the Podravka Group articulated a new vision and mission, as well as a new strategy which will be the basis for the new organisational structure of the Group. The organisation is based on eight profit centres (Vegeta, Podravka Food, Drinks, Fruit and Vegetables, Mill and Bakery, Desserts Programme, Danica, Belupo) and, in this way, provides business transparency for each individual profit centre, a clear division of responsibilities and swift decision making in line with the demands of clients. In addition, Podravka established representative offices in Kiev and Skopje, as well as registered companies in Romania and Yugoslavia. It should also be mentioned that the sale of the Yeast Factory and the Pirovac holiday facilities makes a positive contribution to the strategy which puts the manufacture of foodstuffs at the focus of activity of the company. With the aim of increasing efficiency, an agreement was signed on business-technical co-operation with Microsoft which will increase the quality of the utilisation of IT resources.

The activities of the Podravka Group, aimed at realising the company’s vision – Podravka as a food company operating on the global market and satisfying the needs of clients beyond their expectations – will continue in the second half of 2001. Among other things, Podravka has engaged J.P. Morgan as financial consultants who have the task of analysing and evaluating the strategic options of the Podravka Group with the goal of further expansion and development. Moreover, penetration on new markets continues. A representative office has recently been established in Riga, which will co-ordinate business activities in the Baltic States, while activities are intensifying on the markets of Turkey and Greece.