Of the 35 non-financial companies listed on the Bucharest Stock Exchange that released preliminary results for 2007, 14 posted losses in the last quarter, while 10 reported shrinking profits.
The 35 companies under consideration registered cumulated losses worth 88.6m RON (25.4m euros) in the fourth quarter, compared with a net cumulated income worth 280m RON (80.4m euros) in the same period of 2006. However, their cumulated turnover rose by 6%, which points to the fact that the drop in profit was triggered by higher costs and financial losses.
The biggest losses were reported by Rompetrol Rafinare (RRC) and Oltchim Ramnicu-Valcea (OLT), which posted losses of 219.5m RON (63m euros) and 78.5m RON (22.5m euros) respectively. Another two of the largest companies, Transelectrica (TEL) and Alro Slatina (ALR) also saw their incomes plummet.
Most issuers on the Stock Exchange were harmed during the last part of 2007 by the strong decline of the RON against the main international currencies, as they had to reassess their foreign currency debts at yearend.
Issuers that were hardest hit by exchange rate fluctuations included Rompetrol Rafinare, Oltchim and Artrom Slatina, which reported losses worth tens of millions of RON from financial operations.
Full-year cumulated profits of companies on the Stock Exchange almost halved compared with the previous year, 46%, to a level of 412.5m RON (123m euros). In the first three quarters of the year, the respective companies registered a slight increase in the profitability indicator.
Analysts believe the main factor that led to this situation was the unstable economic environment, characterised by severe exchange rate fluctuations and wage increases above the level of productivity.
"The results were clearly below expectations if we only take into account that 2007 was the first year after
