BUDAPEST - Hungarian car parts and agricultural machinery firm Mezogep on Friday reported lower net profits for 2002, hit by Q1 losses, a strong forint and less-than-planned orders by certain clients.
Sales of the company, which makes 70 percent of its revenue from car industrial business, increased, and it said that despite a recession in the sector, it expected to be able to further lift its revenues due to contracts it already had obtained.
Mezogep, majority-owned by Canada's Linamar Corp., said it had a net profit of 212.2 million forints ($938,300) in 2002, compared with 368.3 million in 2001.
This translates into a lower earnings per share of 26 forints in 2002 against 46 forints in 2001.
Its sales, meanwhile, increased to 16.47 billion forints from 12.41 billion in 2001.
Mezogep said its operating profit had narrowed to 275.3 million forints in 2002 from 445.1 million, with a 20.6 percent rise in operating costs.
Mezogep said its biggest challenge this year was a production launch to deliver gears to Opel Hungary.
"The buyer ordered significantly less parts than planned originally. Therefore this project has not become profitable yet," Mezogep said, adding that sales from this project exceeded 1.5 billion forints in 2002.
But Mezogep's management was confident over the outlook, despite a recession in car industry.