Sales peak in the third quarter; based on orders placed, fourth quarter will be record-breaking. Based on our forecasts, we believe we will attain the planned profit by the end of the year.
In the first nine months of the year, Gorenje Group generated revenue of EUR 900.9 million, and profit of EUR 4.1 million. Sales revenue in the third quarter of 2016 was considerably higher than in the second and first quarter of the year. Most importantly, we continued to improve the structure of our sales.
In the first nine months of the year, our sales revenue amounted to EUR 900.9 million, which is 2.9 percent more than in the corresponding period of last year, and consistent with the planned dynamics. EBITDA stood at EUR 60.5 million, and EBIT at EUR 25.2 million, up 54.5 percent over the same period of the year before.
Successful performance is fuelled by major appliance sales on a part with last year's same period figure, and 36.3-percent surge in revenue from small domestic appliances. Increased investment into development and marketing provided support for improved structure of sales, evident in the increase of upmarket brand sales, especially the premium brand Asko for which sales were up 7.9 percent, and increase in sales of premium and innovative appliances.
Favourable geographic composition means increase of sales in the markets of Benelux, Central and Eastern Europe, including Russia and Ukraine, as well as Australia and the USA.
At the same time, raw and processed materials costs were successfully adjusted to the higher sales volume, generating considerable savings. Logistics, warranty repairs, and currency risks were also managed well.
In the first three quarters of the year, Gorenje Group's results from operating activities (EBIT) was EUR 25.2 million, and net profit for the period reached EUR 4.1 million.
Net financial debt of good EUR 405 million is, with higher revenue, comparable to the 2015 figure, while our net financial debt to EBITDA ratio has been improved by 1.0, especially on account of better profitability.
In our estimate, we will attain the planned profit
Based on incoming orders, we expect our 2016 fourth-quarter sales to be the highest quarterly sales in this year. Group revenue in the period will be between EUR 340 and 350 million. Thus, we will attain even higher utilization of manufacturing capacity, which will in turn improve the sales structure by products and regions, and positively affect further growth of Group profitability.
In our estimate, Gorenje Group will attain in 2016 the planned net profit of EUR 7.6 million.
Changes in the Gorenje Group organization
At today's session, the Supervisory Board was also presented the changes to Gorenje Group organization, as planned by the Management Board, consistently with the strategic policy of operational excellence, for 2017. Gorenje Group will move from conventional functional organization towards a business-product oriented organization, leaving more room for entrepreneurial approach and focus on further performance improvements.
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