Zreče, 30 May (STA) - Unior, the majority state-owned forgings and tool manufacturing group, posted a net loss of EUR 3.2 million for the first quarter of the year as sales dropped by 11% year-on-year to EUR 58.4 million.
The Zreče-based company said the loss was EUR 3.7 million lower on a like-for-like basis, that is, excluding the operations of the tourism arm and machine tools production, which have been sold and discontinued, respectively.
Apart from lower sales, the business was affected by the cost of severance pay for redundant workers in the amount of half a million euros, and lower financial effects from the operations of affiliated companies.
The core company Unior posted a loss of EUR 3.7 million for the first quarter, after a minimum profit in the same period last year. Revenue was down by 9% to EUR 46.8 million.
Apart from lower sales, the deterioration is attributed to a decrease in the value of inventories of products and unfinished production, lower financial income and higher severance costs.
The financial report points to challenges faced by European industry, in particular the automotive sector, including military conflicts in Ukraine and the Middle East, rising trade tensions and US tariffs.
This difficult transition period in the European automotive industry affects Unior's operations, in particular forge manufacturing as its core business.
While the order books were in good shape in the first quarter, sales in this segment fell year-on-year, partly due to lower prices as a result of lower buying prices of steel, and partly due to lower production volumes caused by frequent downtimes, which are blamed on worn-out equipment and underinvestment in forging equipment in previous years.
Hand tool sales were also down with production disrupted by relocation of capacities from a site in south Slovenia that was shut down, to the Zreče location.
The management's key task this year will be to ensure financial stability and restructure operations.
