Tehnika reports a loss of 13 million kuna

The construction company Tehnika and its affiliated companies recorded a loss of 13.04 million kuna in the first half of this year, which is significantly higher than the loss of 6.2 million kuna from the same period last year, according to the consolidated financial report of Tehnika published on the Zagreb Stock Exchange.

According to this data, total revenues amounted to 439.1 million kuna, which is 4.6 percent higher than in the first half of last year, but also 15.3 percent lower than planned.

Total expenses, on the other hand, grew faster, by 6.1 percent, amounting to 452.2 million kuna, with the largest increase in costs recorded in the category of other external costs, by 35.3 million kuna.

The management notes that a loss of 13 million kuna was recorded in the first six months, while the plan was for a profit of 2.2 million kuna.

They explain that the decrease in realization and the larger loss are the result of unfavorable weather conditions in January and February 2013, as well as a lack of investment work and inadequate utilization of production capacities, and that weaker sales of apartments in market construction and a drop in prices (margins) in the construction industry also had a negative impact.

According to data from July 18, Tehnika had contracted 92.3 percent of planned realization, and with jobs pending contracting, capacity utilization would be 103 percent compared to the plan.

“From the above, the situation does not seem as bad as the business result shows, but unfortunately, due to the lack of and low prices of contracted construction work for the first half of the year, a negative business result was achieved. Unfortunately, the situation with contracted clean construction work in the second half of 2013 is even less favorable as most of the contracted work relates to craft work, which is why production capacities remain unutilized with all the consequences that arise from this (fixed costs of employee salaries and equipment depreciation remain uncovered),” explains the management of Tehnika.

However, the company hopes that with Croatia’s entry into the EU on July 1, 2013, things will change for the better “because the current state of the Croatian economy and its trends and movements do not offer much optimism, especially not in construction due to the permanent reduction of investments.”

Data from the financial report for the parent company, Tehnika d.d., shows that this company recorded a loss of 13.67 million kuna in the first half of the year, while at the same time last year the loss amounted to 3.9 million kuna.

Tehnika achieved total revenue of 427.5 million kuna in the first half of the year, which is an increase of 4.11 percent compared to the same period last year, while total expenses grew faster, by 6.4 percent, to 441.2 million kuna.