ECONOMY

ELBO gets a fighting boost to sales

The government yesterday announced it will assign the production of 150 Centaur armored fighting vehicles (TOMA) for the Greek army to the Hellenic Vehicle Industry (ELBO), an order initially budgeted at 410 million euros. Announcing the plan, Deputy Economy Minister Giorgos Floridis, who represented the government as the chief shareholder at Thessaloniki-based ELBO’s annual general meeting, said the army retains an option for 130 more TOMA and that the company will also participate in a joint production scheme for Leopard tanks and be assigned the overhaul of another 182 Leopards. He said ELBO – in which the Mytilineos group acquired a 43 percent stake and management in 2001 – had considerably upgraded its technological capabilities and financial results since privatization. «ELBO is entering a phase of full growth. It has been a unique example of coexistence of State and private enterprise since its privatization. The experiment has been fully successful,» he said. He added that the government aspires to make the company a pole of development in northern Greece, where there is a relatively high unemployment rate. ELBO Managing Director Evangelos Mytilineos concurred, pointing out that the concern has subcontracting deals with about 500 small and medium light manufacturing firms in the area, and plans to invest more than 40 million euros in the next three years. He said the delivery of the TOMA vehicles will begin 24 to 27 months after the signing of the contract – projected for July. ELBO has a strategic plan of promoting sales of the vehicle abroad, beginning with Balkan countries, he said. Profits quadruple Mytilineos said 2003 will be the last year that ELBO will make provisions for the losses of past fiscal years and that it will pay out a dividend in 2004. «According to our forecasts, confirmed by first-quarter financial results, ELBO will realize 25 percent turnover growth in 2003 to more than 150 million euros and a 40 percent rise in profitability to about 12 million euros.» ELBO posted almost quadrupled net pretax profit to 8.7 million euros last year, despite a 14 percent drop in turnover to 123.6 million euros, a development attributed to a drastic restructuring and gradual adaptation to operating under private enterprise criteria. The improvement took place without a reduction in the work force, according to a contractual clause that expires in August. The gross profit margin doubled to 20 percent, largely reflecting the drastic reduction in costs. ELBO also has satisfactory liquidity, with zero short-term loan liabilities and 15.5 million euros in bank deposits. Depreciation provisions were up 50 percent to 4.7 million euros.