Christis: Preliminary results 2004
18/2/2005 9:27
The Cyprus accession in the EU in May 2004 brought several changes in the sector of dairy industry, which affected negatively the financial results for 2004. Also, the decision to terminate the operations of the associated company Dodoni Ice Creams (Cyprus) Ltd in which our Company has a stake of 26%, accumulated losses of £487.678. This loss is non-recurring.
The loss for the year before the recognition of the non-recurring cost of termination of operations of Dodoni Ice-Creams (Cyprus) Ltd stood at £333,406 and is attributable to the following reasons:
1. Sales
The reduced quantity of raw material did not allow the Company to meet the demands especially in exports. As a result, sales dropped 3.4% to £23,333,435 against £24,035,218 in 2003. The Company had extraordinary expenses in order to satisfy its customers abroad.
2. Gross profit
From April 2004, there was an increase in the price of fresh milk. The subsidies that strengthened our effort for the export of cheese products were abolished and replaced with subsidies for exports in third countries only.
The competition from imported products became more intense after the abolition of all import duties on EU products.
These reduced the margin of gross profit from 23.4% in 2003 to 21.7%.
3. Expenses
The administration expenses, selling and distribution expenses increased by £344,000 or 7.5% compared to 2003. This is mostly attributable to the price of fuel and the increase in the advertising campaigns due to the import of new products in the market and the sponsorship of the Cyprus Football Championship. Their high cost affected the results for 2004 but are expected to contribute to the results that will follow.
The Company achieved a drop in its finance costs by £85,000 or 15.8% against 2003
PROSPECTS
The Board of Directors believes that the Company will become profitable. This will be based on the following factors:
- Sufficient raw material that will satisfy the increased needs.
- Readjusted sale prices not only for the exports but also for the local sales, which will improve the margin of profit.
- Restraining of operating expenses
The Board of Directors will make every possible effort to reduce the negative impacts and lead the company to profitability.
The loss for the year before the recognition of the non-recurring cost of termination of operations of Dodoni Ice-Creams (Cyprus) Ltd stood at £333,406 and is attributable to the following reasons:
1. Sales
The reduced quantity of raw material did not allow the Company to meet the demands especially in exports. As a result, sales dropped 3.4% to £23,333,435 against £24,035,218 in 2003. The Company had extraordinary expenses in order to satisfy its customers abroad.
2. Gross profit
From April 2004, there was an increase in the price of fresh milk. The subsidies that strengthened our effort for the export of cheese products were abolished and replaced with subsidies for exports in third countries only.
The competition from imported products became more intense after the abolition of all import duties on EU products.
These reduced the margin of gross profit from 23.4% in 2003 to 21.7%.
3. Expenses
The administration expenses, selling and distribution expenses increased by £344,000 or 7.5% compared to 2003. This is mostly attributable to the price of fuel and the increase in the advertising campaigns due to the import of new products in the market and the sponsorship of the Cyprus Football Championship. Their high cost affected the results for 2004 but are expected to contribute to the results that will follow.
The Company achieved a drop in its finance costs by £85,000 or 15.8% against 2003
PROSPECTS
The Board of Directors believes that the Company will become profitable. This will be based on the following factors:
- Sufficient raw material that will satisfy the increased needs.
- Readjusted sale prices not only for the exports but also for the local sales, which will improve the margin of profit.
- Restraining of operating expenses
The Board of Directors will make every possible effort to reduce the negative impacts and lead the company to profitability.
