ECONOMY

Petzetakis in the red for first nine months of this year after one-off charge of 2.5 bln drs

Pipe manufacturer Petzetakis Group said yesterday that a one-off charge of 2.5 billion drachmas related to acquisition costs, bond losses and restructuring expenses put it in the red in the first nine months of the year. The group posted a loss of 1.17 billion drachmas before minorities in the year to September 30 against a profit of 1.94 billion drachmas in the same period in 2000. Chief Executive Officer George Petzetakis said the group decided to incur the entire charge of 2.5 billion drachmas this year, instead of spreading it out over a period of years as this would enable it to kick off next year with a clean slate. The drastic cost cut will secure our future profitability and enable us to take advantage of a recovery in our principal markets, he told reporters. He said the practice is also in line with International Accounting Standards. Petzetakis ran up the heavy bill this year as it embarked on a series of acquisitions in Europe, South Africa and across the Atlantic. New additions to the group included German hose producer Behka Plast, Canadian-listed Imperial Plastech, Main Pipestreams in South Africa, Italian company Induplas and Flexiplas in Spain. On the positive side, Petzetakis said the group is ensured of revenues of more than 70 billion drachmas next year following the consolidation of the new subsidiaries into organization. The estimate does not take into account organic growth. Sales this year are projected at 55 billion drachmas. Revenues in the nine-month period rose by 62 percent to 41.1 billion drachmas while adjusted EBITDA increased by 54 percent to 5.3 billion drachmas. The group also announced a new organizational structure in a move designed to exploit synergies and rationalize operations. All European subsidiaries will be grouped under a division called Eurohose, while the Greek unit, Petzetakis Greece, will focus on Southeast Europe and the Middle East. Operations in Namibia and South Africa will be consolidated under another division called Petzetakis Africa. The European division currently accounts for 35 percent of group revenues, the Greek side the same percentage and the Africa unit, the remaining 30 percent, Petzetakis told Kathimerini English Edition. He said that European and US business had taken a hit since September 11, while the other two divisions were little affected.