Lacquer and paint producer Policolor Bucharest saw its net profits increase more than fourfold in the first quarter of 2005 in comparison with the corresponding period last year, with turnover posting an about 30% increase.

According to their report to the Bucharest Stock Exchange, the company made net profits of 10.7 billion ROL (290,000 euros) in the first three months of 2005, with sales increasing to 166 billion ROL (almost 4.5 million euros). Last year, first-quarter sales were in the region of 142 billion ROL (3.5 million euros), with net profits reaching 2.4 billion ROL (60,000 euros).

Still, the surge in profits is not necessarily the result of increasing sales as the company also registered operating losses of 1.4 billion ROL (37,500 euros) in the January-March period.

The bulk of profits came from the financial operations conducted by Policolor in this interval.

The company''s financial revenues amounted to 19.5 billion ROL (525,000 euros). Policolor officials could not be contacted for comment.

Policolor''s first-quarter growth is a continuation of last year''s positive trend. For 2004 Policolor posted a 65% rise in profits, with sales up 30%. The company ended the year with net profits of 42.2 billion ROL (1.04 million euros).

Policolor''s improved financial results have determined the company''s main shareholders to postpone their exit from the business by one or two years to allow the company to keep growing. The main shareholders in the Bucharest-based company are Romanian Investment Fund Cyprus, which has a 34.1% stake, Romanian American Enterprise Fund, 32.94%, Romanian Reconstruction Limited Cyprus, 9.96%, and Societe Generale Fund, 7.73%. The remaining 14.19% is owned by various other shareholders.

For this year Policolor has forecast net profits of 48 billion R