The profitability of A. Zorpas & Sons Public Ltd for the first quarter of 2006 recorded a drop of 7% due to the increased production cost and the expenses.

According to its indicative results released on Wednesday, the net profits stood at £675 thousand against £729 thousand in the corresponding period of 2005 and the profit from operations dropped 12% to £739 thousand against £839 thousand in 2005. The Company believes that the results were largely affected by the increase in operating cost and labour cost. “This affected negatively the Group’s profitability, which stands at the same level as last year due to the cooperation in the production and the improved operation of its chain stores”, the announcement reported.

According to its financial statements, the cost of production showed an increase of 20%, while the administrative and selling & distribution expenses increased 9% and 5% respectively.

Despite the lower profitability, the company’s turnover surged 13% to £7.4 million against £6.6 million in the corresponding period of 2005. This increase is linked to the expansion of the stores’ network and the “high quality of the products, certified by HACCP”.

Zorpas expects that the results for the full year will be similar to those of 2005.