Monbat Projects 2008 Profit At 16.1 Mln Euros

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Monbat Projects 2008 Profit At 16.1 Mln Euros

At its meeting today, the management of Monbat JSC () adopted the prognoses for the group's development and results in the period 2008 – 2009.

It is important to note that the following prognosis about profit, EBIDTA, and net sales revenues is based on the current prices of lead – 2,500 USD per tonne in 2008, and 2,000 USD per tonne in 2009.

At the beginning of 2008 the company will present its 2008 – 2009 Investment Strategy to investors.

The group's strategic goal is to enhance Monbat's competitiveness and to make it one of the top 5 companies in Europe's accumulator business.

In order to achieve this, Monbat aims at boosting sales by 184% by 2009 (compared to 2006), increasing net profit 505%, and a 293% hike in EBIDTA by 2009.

Monbat estimates 2008 revenues to amount to 87.73 mln euros, and net profit to reach 16.1 mln euros (1.615 leva per share).

The company aims at reaching production capacity of 2,550,000 starter batteries, and doubling the production capacity in manufacturing of telecommunications and stationary batteries to 200,000 units by 2009.

A new production line will be introduced in the Dobrich-based Start JSC – batteries for motor trucks, of which 250,000 units will be produced in 2009.

Modernization of Monbat JSC and Start JSC has been planned - purchase of new equipment etc.

In order to achieve these results, the company needs to reduce the production's prime costs considerably. The production of accumulators has the highest cost in these terms – more than 69% of all in Jan – Sept 2007) due to the costs on lead, lead allies and polypropylene, which account for 78% of all materials expenses in October alone.

Under the investment strategy Monbat JSC will increase the share of materials made by the company itself to between 38% and 60% in 2008,and 75% in 2009. The company will use 40% more lead and lead allies in 2008, and another 40% more in 2009.

The recycled propylene will satisfy the company's needs 100%. Monbat JSC will need 27,000 tonnes of lead and lead allies in 2007, 38,000 tonnes by 2008, and 53,000 tonnes by 2009.

The management also decided to introduce some changes within the company's accounting practices in 2008 – 2009, and namely of the amortization plan for the period.
As of January 1, 2008 the amortization standard for machines will be 10%.

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