* Equity increase in first half of 2010
* Company expects not to pay a dividend for 2009
* Sees sales growth of 28.6 pct by end of 2013
By Marja Novak
VELENJE, Slovenia, Jan 26 (Reuters) - Slovenia's largest
household appliances maker Gorenje <GORE.LJ> plans to issue new
shares and could spend the cash raised on takeovers, its chief
executive Franjo Bobinac told Reuters on Tuesday.
The company will probably not pay a dividend for the second
year in a row in 2009, Bobinac said, adding results are expected
in due course. The company expects to end 2009 with a loss for
the first time since being listed in 1998, mainly due to lower
demand amid the global financial crisis. []
However, Bobinac said group sales were expected to reach 1.5
billion euros ($2.11 billion) in 2013, up 28.6 percent versus
2009. Profitability is expected to rise as the company plans to
cut costs and raise the sale of products in the higher price
range.
"We are planning an equity increase in the first half of
this year and the money may be spent on takeovers, restructuring
and developing new products," Bobinac said in an interview.
He declined to say if any acquisition was imminent, but said
takeovers were "absolutely possible" in 2010.
Gorenje, Slovenia's second largest exporter and employer, is
eying firms that have good market positions and established
trademarks, he said.
MOVING PRODUCTION?
Bobinac said Gorenje might move some of its production
abroad if necessary to cut costs and overcome poor labour
flexibility in Slovenia.
"Production in Slovenia depends upon wage pressures, upon
labour legislation, which is reducing competitiveness. It is
fortunate that Gorenje has three strong production locations, in
Slovenia, the Czech Republic and Serbia."
Gorenje, with a market capitalisation of some 183 million
euros, produces about 75 percent of its products in its home
country.
He said it was easier to hire and fire people in the Czech
Republic and in Serbia than in Slovenia and expressed hope that
the centre-left government of Slovenian Prime Minister Borut
Pahor would make the labour market more flexible as promised.
Household appliances, which account for about 80 percent of
Gorenje's revenue, will remain Gorenje's core business, Bobinac
said. The company also deals in waste disposal and electricity
trading.
So far this year orders in the first quarter are higher than
in the same period last year, he said.
Bobinac sees higher sales potential in fast growing markets
such as China, Russia, India and Brasil, but said sales were
also growing in industrial countries.
"In 2009, which was the year of the crisis, Gorenje managed
to raise sales in Germany by 25 percent and increase its market
share there to 4 from 3 percent," said Bobinac.
He said Gorenje's investment will rise to some 28 million
euros in 2010 from 26 million last year and added the company
will this year further reduce debt from 374 million euros in
2009.
Gorenje plans to reduce the number of employees to fewer
than 10,000 by the end of 2013 from some 10,580 at the end of
2009.
Gorenje shares closed 0.99 percent lower at 12.94 euros on
Tuesday while the blue-chip SBI index <> eased 0.13 percent.
(Reporting by Marja Novak in Ljubljana; Editing by Zoran
Radosavljevic and Sharon Lindores)
($1=.7097 Euro)
