Enschede, Netherlands -Losses at troubled Russian tyre maker Amtel-Vredestein increased in the first half, despite an unaudited 27 percent increase in sales. The company reported a net loss of $33.5 million, up from $22 million in the same period the previous year.
Unaudited sales for the six months to 30 June 2007 were $439 million, compared with $347 in the same period a year ago.
In terms of operating result, the company reported similar numbers to last year, with operating loss almost unchanged at $3.5 million compared with a loss of $4.4 million a year earlier.
The company said the small improvement in operating income together with diminishing restructuring costs and decreased taxes were offset by increased interest payments, a lower foreign exchange gain ($3 million vs $8 million in 2006) and the reduction of interest income when compared with the first six months of 2006. The company's total debt increased to $820 million at 30 June 2007, compared with $678 million at the end of 2006. Of this $142 million debt increase, approximately $79 million can be attributed to the Company's Voronezh II project and related investments and $16 million to the Moscow Tyre Plant acquisition.
Petr Zolotarev, A-V's CEO said, â€œAmtel-Vredestein expects to become profitable on an operating basis in 2007 and its passenger car tyre business, particularly in Russia, is quite strong. There is no doubt that the company is well-poised for dynamic future growth,â€
The company said it sold 6.8 million passenger car tyres during the first half 2007 - a 15.9% increase over the same period in 2006. This included 2.2 million premium segment (â€œAâ€) tyres, 3.3 million value segment (â€œBâ€) tyres and 1.3 million budget or discount segment (â€œCâ€) tyres.
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Press release from Amtel-Vredestein