Listed company losses in Q4 at some Euro127 mln

Companies listed on the main market of the Bucharest Stock Exchange (BVB) announced total losses worth RON 482.2 million (€126.9 mln) in last year's fourth quarter, which was one of the weakest quarters in the past few years.

Losses were caused mainly by the reevaluation of debts and the setting up of provisions. Most listed companies were affected by the depreciation of the national currency against major currencies, given that firms were forced to reassess their foreign currency debts at the end of the year and the difference was included in their results.

"I think that prior to 2004 there were quarters in which companies registered cumulated losses. However, most issuers were subject especially to financial losses, which are not due to a poor economic climate, but rather to accounting regulations. On the other hand, I expect future results to decline for most companies," said Adrian Danciu, Analyst of Broker Cluj. In last year's final quarter, 25 of the 40 companies, considered by Business Standard, registered losses, compared to only 13 in 2007. The most significant loss, of RON 282.8 mln (€74.4 mln), was posted by the Rompetrol Rafinare oil company, most of which came from the reevaluation of the company's foreign currency debts at the end of 2008.

The Oltchim chemical complex and Transelectrica electricity company rank second and third, respectively, in terms of losses. Oltchim lost RON 198 mln (€52 mln) in Q4, considering that it registered losses worth RON 225.64 (€61.3 mln) in the whole of 2008."It is normal to see financial losses and I think we will see something similar in 2009. These results are also an effect of the crisis. For this year I expect to see operating losses at several companies and lower growth rates," said the Chairman of the Intercapital Invest brokerage company, Razvan Pasol.

According to Pasol, financial results will not have a significant impact on the market, considering that these are already included in the price. "Most results are included in the price and I do not think we will see high fluctuations in terms of quotations. Companies whose results were far below expectations, such as SIF Moldova, will be subject to more important evolutions," Pasol added.Considering the whole of 2008, the 40 companies had total earnings of RON 1.469 billion (some €400 mln), close to the level registered in 2007. No announcement of preliminary results for 2008 has come yet from 15 companies, including Romania's largest company, Petrom, the Trangaz gas company, the Alro aluminum smelter, and the SIF Banat-Crisana financial investment company. Petrom recently announced it intends to set up additional provisions in last year's final quarter, which will especially affect future dividends.

Business Standard