Bloomberg News

Croatian Agrokor Nine-Month Net Income Halved on Forex, Expenses

December 05, 2012

Agrokor d.d., Croatia’s largest company, said its nine-month net income fell by half from a year ago as foreign-exchange fluctuations and increased financing expenses negated modest revenue growth.

Net income declined to 202 million kuna ($35 million) from 406 million in the year-ago period, the Zagreb-based food producer and retailer said in an e-mailed response to Bloomberg questions. Earnings before interest, taxes, depreciation and amortization, or Ebitda, rose 2 percent to 1.95 billion kuna, while revenue grew 1.8 percent to 22 billion kuna.

“We have achieved growth this year, but our net income was affected by negative foreign-exchange changes, particularly related to Serbia’s dinar and increased financing costs,” the company said in the e-mail.

While some of Agrokor’s subsidiaries, such as its retail arm Konzum d.d., are publicly traded on the Zagreb Stock Exchange, the holding company Agrokor d.d. is not listed and founder and Chairman Ivica Todoric owns more than 90 percent of the stock. The largest company by revenue in the former Yugoslav region, Agrokor releases its results only to investors.

“The good news is that Agrokor is maintaining its profitability levels, while net income volatility is due to foreign-exchange losses, Mikhail Galkin, an analyst for Moscow- based VTB Capital Plc, said by e-mail.

Galkin said Agrokor’s Konzum chain grew its top line and improved margins by keeping prices unchanged and cutting costs. The company’s retail arm in Bosnia-Herzegovina also showed ‘‘strong results” in revenue and Ebitda, he said.

To contact the reporter on this story: Jasmina Kuzmanovic in Zagreb at

To contact the editor responsible for this story: James M. Gomez at

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