Dafora is scheduled to post its 2Q09 results (unconsolidated, Romanian Accounting Standards) on 14 August 2009. We expect the firm to post a net loss of RON 0.6m for 2Q09 versus gains of RON 4.6m in 2Q08 and RON 0.2m in 1Q09. The company generally posts lower sales in the second quarter, with volumes picking up in the third and fourth quarters. We expect the company’s 2Q09 results to be affected by the decline in the construction sector in the period.
(38,33 EUR, 0,01%) operating revenues are expected at RON 51.6 m in 2Q09, down 9.7% q/q and 27.7% y/y. Revenues from construction are likely to fall more rapidly than revenues from drilling in 2Q09. This should be due to lower demand in the country’s construction sector, which decreased 24.5% in May and 13.7% in April according to the Romanian Statistics Office — the most abrupt decline in the EU. Dafora’s revenues are split between construction works (45%) and drilling activities (55%). We expect fairly constant revenues from drilling activity as a result of the continuing investment plans of companies active in the oil and gas sector (i.e. Romgaz, Petrom).
Operating result is expected at RON 3.8m in 2Q09, down 12.4% q/q and 50.5% y/y. The operating result is lower than last year due to declining revenues and lower margin as a result of lower economies of scale. Although material costs have decreased due to lower estimated volumes of executed works (down 7.7% q/q and 38.1% y/y), this has not been sufficient to compensate for the sharp decline in revenues.
Financial result is expected at a RON 4.4m loss in 2Q09, up 7.8% q/q and 48.9% y/y. We expect interest revenues to decline in the second quarter as a result of the firm’s decreasing cash position and relatively high leverage ratio. Although the company has a significant FX risk, this is only accounted for at the end of each financial year and thus affects the financial result of the fourth quarter.