Zaharni Zavodi Expects 2007 Pre-Tax Profit To Reach 4.5 Mln Leva

Zaharni Zavodi Expects 2007 Pre-Tax Profit To Reach 4.5 Mln Leva

Zaharni Zavodi Jsc () expects its 2007 pre-tax profit to come to 4.5 mln leva (2.300 mln euros), as a result of investments in modernization and cutting costs on energy and materials, the company said.

Consolidated revenues are projected at around 70-80 mln leva in 2007, compared with 100 mln leva in 2006.

The subsidiary Zahar EAD reports sales of 24.582 tonnes of white sugar in the first nine months of the year, which is 50% down from 2006. Sales of white sugar constitute 70% the group's total revenues.

Zaharni Zavodi is a component of BSE's index BG40. The company plans to increase capital in January, in order to fund its investment strategy.

The company will seek 32.4 mln leva (16.565 mln euros) in capital increase. 2.084 mln shares will be issued at 15.56 leva, and equity capital will be increased 10.418 mln leva (5.326 mln euros).

In order to provide funding for its investment projects the company will issue a debenture loan worth 3 mln euros.

Zaharni Zavodi Jsc consists of a sweets factory, a spirits factory, a packaging factory, and a repair shop. The company's subsidiary Zahar, based in Stara Zagora, controls a sugar plant and a thermal power plant. A total of 12.5 mln leva (6.391 mln euros) has been invested in the reconstruction of the sugar plant between 2001 and 2007.

Zaharni Zavodi has plans for expansion of the spirits plant, but currently, modernization with regards to meeting environmental sustainability requirements is top priority for the investment program. These modernizations include installation of filters in the TPP and developing e method for reuse of technological waste products from the Spirits Factory.

Zaharni Zavodi's investment strategy for the next three years requires some 10 mln leva (5.112 mln euros), and this figure may grow, as the company is trying to meet all ecological requirements, as well as to cut costs and increase production capacity.

In 2007 a total of 7 mln leva was invested in modernization, automation of production, cutting costs and introducing “green” improvements. Considerable investments were also poured in the production of ethyl alcohol, sweets, and in the warehouse facilities.

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