Neochim's Gross Profit Up 3.5 Times to 22.3 Million Leva

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Neochim's Gross Profit Up 3.5 Times to 22.3 Million Leva

The gross Q1 profit of Dimitrovgrad-based Neochim Jsc ()  is up 3.5 times to 22.3 mln leva (11.4 mln euros) or 8.4 leva per share, the report filed with BSE revealed. Last year the company's Q1 profit amounted to 6.336 mln leva (3.23 mln euros) or 1.58 leva per share.

Sales revenues rose more than 26% to 95.1 mln leva (48.6 mln euros), outpacing the hike in costs, which grew 5% to 72.29 mln leva (36.9 mln euros).

What is characteristic about the company's production cycle is that it continues uninterrupted for some 6-9 months during a year, then in the remaining 3-4 months the company executes installation maintenance.

The company's objective is to work at full capacity (of more than 70%). Thus, Neochim aims at reducing the products' prime cost, which will allow the company to keep end prices unchanged.

Among Neochim's current priorities is expansion to new markets (both local and foreign) and more specifically entering the EU markets. The company is also aiming at sustaining its market share in spite of the competition of import.

Numerous factors are influencing development perspectives, such as the weather changes, the wheat prices, subsidies, the debt of the cooperations (which are the company's prime clients). All these factors are difficult to forecast and that is why the company did not engage in making any long-term prognoses.

Natural gas is the main raw material used by the company.

Neochim's core capital stands at 2.654 mln leva (1.35 mln euros).

After the release of the report, the stock surged by more than 15% and is currently traded at an average of 67.21 leva a piece.

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