News Parkiet

Banking

Bank earnings fudged by new accounting standards

All major Polish banks but one reported stronger first quarter earnings this year, but their financial reports were not always comparable because of recent introduction of International Accounting Standards for companies trading on the Warsaw bourse. 'In general earnings were higher than people expected, mainly because of lower provisions', industry analyst Marcin Materna from Millennium DM brokerage said. Top-line figures were in some cases lower than analyst estimates because banks are now recognizing income from commissions and fees over a period of time, instead of one-time payments that went straight into revenue reported to investors.

Apparel

Redan plunges after restating 2004 earnings

Shares of Redan SA apparel retailer fell as much as 20 percent yesterday to a new all-time low after the company said its 2004 earnings would be lower by a third because it had to take back unsold clothing from wholesalers. Redan, which was founded ten years ago by Łódź businessman Radosław Wiśniewski, said its profits totaled just over 10 million zloty versus previous estimate of PLN 15 million in its fourth-quarter report. Sales and operating profits were also revised to reflect higher unsold inventories.

Also yesterday, Redan delivered a double blow to the few investors still interested in the stock by posting its first quarterly loss since it went public in late 2003. Redan lost 4.5 million zloty in the three months to April despite sales that were 40 percent higher than last year.

The company blamed lower margins as it tried to unload winter and fall collections at its Top Secret stores for the unexpected first-quarter loss. Gross sales margins at Top Secret fell to just 2 percent in June, turning to minus 5% in February, Redan CEO Piotr Kulawiński said.

Steel industry

Stalprofil earnings halved to PLN 7.3 million

Steel trader Stalprofil SA said yesterday its first quarter earnings fell as much as 45 percent because of lower steel prices. Dąbrowa Górnicza, Silesia-based Stalprofil, whose shares are part of MIDWIG mid-cap index, reported profits of just 7.3 million zloty versus over 13 million zloty last year. Quarterly sales were down to less than 121 million zloty from PLN 189 million a year ago.

The company said it would publish an official earnings guidance within a month. In the meantime, sources close to the situation say Stalprofil is planning earnings of at least 25 million zloty on sales of PLN 600 million.

Shares of Stalprofil are down about 40 percent this year. The stock closed at 82 zloty yesterday, just a few grosze above its 52-week low.

Based on 25 million zloty whisper number, Stalprofil has a forward price-earnings ratio of 5.74.

Information Technology

Comp Rzeszów revenues double

Software house Comp Rzeszów said its first quarter sales have more than doubled to as much as 34.7 million zloty thanks in part to last year's acquisition of Slovakia's Asset Soft, a rapidly-growing software house that specializes in applications for banks and other financial institutions. First-quarter earnings totaled 4.25 million zloty, a three-fold increase from the same period a year ago.

Information Technology

Ster-Projekt-ABG merger cleared by shareholders`

Shareholders of two mid-sized information technology providers, publicly traded Ster-Projekt SA and ABG, both based in Warsaw, voted yes to a planned merger of the two firms yesterday. Both firms are part of Prokom Software IT groups.

Separately, tax authorities in Warsaw demanded back payment of 4.3 million zloty in VAT taxes from Ster-Projekt. The company said it would pay the tax in order to avoid interest payments and then appeal Tax Office ruling.

Inflation

Polish CPI rose 3 pct. in AprilPoland's annual inflation rate slowed to 3 percent in April, the lowest in twelve months despite a spike in fuel prices, Central Statistical Office said yesterday. Median forecast of economists polled by PARKIET called for a year-to-year increase of 2.9 percent. Consumer prices rose 0.4 percent from the previous month, CSO said.