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Glaverbel: recent report

10 September 1998: Glaverbel, the Belgian glassmaker, has announced a 67% increase in first-half net profits from BFr 666 million to BFr 1.11 billion (US$ 30.8 million) and said it expected further st…

10 September 1998: Glaverbel, the Belgian glassmaker, has announced a 67% increase in first-half net profits from BFr 666 million to BFr 1.11 billion (US$ 30.8 million) and said it expected further strong growth in the second half in spite of the Russian crisis. The group has interests in Russia after leading a consortium which acquired 25% of Bor Glass Works, the main Russian flat glass producer, for US$ 20 million last year. The company said Russia“s financial crisis would have only a limited impact on Bor Glass Works, which was debt-free and occupied a dominant position in raw and automotive glass. “Russia is not a major investment for us,” Chief Executive Office Luc Willame said. Glaverbel reportedly spent BFr 800 million on the 25% stake it owns in Bor Glass Works. Bor was “financially and commercially protected against the current crisis” because it made the highest quality glass in Russia and had a 90% share in the automotive market. The jump in net profits was achieved without a contribution from PPG Glass Europe, the flat glass business based in France and Italy, whose acquisition Glaverbel completed recently (see GlassOnline report of 28 August 1998). Consolidation of the former PPG businesses, acquired at a cost of US$ 333 million, would have a “positive influence” on the second half, after financial charges, said Willame. “PPG will contribute directly to our earnings in the second half, even after financial charges,” he said. Willame added that improved performance in the automotive sector and the bouyant state of the construction market were increasing demand for its flat glass products and would boost earnings. The first-half profit increase reflected productivity gains achieved by a cost-cutting programme, and a better performance from processing activities. Total sales increased 7% to BFr 22.8 billion. Earnings per share jumped 60% from BFr 109 to BFr 174.

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