Nestlé Hungary: strong results impacted by exchange rates
financial results for 2003. Despite the fact that sales grew
significantly, the division was hit by the continuing strength of
the Swiss franc.
Nestle Hungaria recorded consolidated net sales revenue of Huf 58.4 billion (€234.1m) in 2003, a figure that was 9 per cent up from the previous year. However pre-tax revenue dropped Huf 800 million or to HUF 2.8 billion a fall of 22 per cent, managing director Laurent Freixe told a news conference.
Freixe stressed the fact that, just as had happened for the group results, the division had been impacted by unfavourable exchange rates, which had turned healthy margins into losses. However Freixe pointed out that operating profit had increased 22 per cent in the course of last year, rising to Huf 4.7 billion and that overall the division had had one of the strongest set of results in the extensive Nestle group.
The company added that Nestle Scholler, which was acquired by the company in September last year, were not included in the company results for 2003, but will register for the 2004 financial year instead. In respect to targest for 2004, the company made no specific estimates, only saying that it believed that ice cream sales would fall in the region of Huf 5 to 6 billion.
Of the total sales for 2003, Huf 40 billion came from processed food products, the rest being derived from pet food sales. Although sales for the domestic market remained relatively stable, the export market, which generally serves neighbouring countries, rose by 36 per cent to reach Huf 24.8 billion.
Last year the company spent approximately Huf 2 billion on development projects, and it is forecasting to spend approximately the same in 2004. The results of last year's investments are that the Diosgyor and Szerencs plants are now under one joint management which concentrates on the production of instant drink powders.
According to a report from MTI Eco-News Nestle's Hungarian division has a good chance of extending the influence of its five production bases throughout the region. In addition to the facilities for instant drinks, Nestle Hungary also has production facilities for chocolate figures, pet food and ice-cream plant.
Throughout the region Nestle also has operations in Czech Republic, Slovakia, Poland, Russia, Ukraine. Although the group reported that in its operations in Eastern European region experienced strong organic growth for the 2003 financial year, the group's key western European market saw stagnant sales, as did global confectionery sales.
