Dafora reported unconsolidated Romanian Accounting Standards (RAS) results for 2Q09 after market close on Friday. Net profit came in at RON 0.9m for 2Q09, down 80.9% y/y and up 393.8% q/q. We had expected a loss of RON 0.7m for the period. The company showed a lower-than-expected operational performance in 2Q09, with the positive impact on the bottom line coming from the financial result. No consensus was available regarding the 2Q09 results but we expect a neutral market reaction.
Operating revenues came in at RON 48.3m for 2Q09, down 32.3% y/y and 15.5% q/q. The result was 6.4% below our expectation. As expected, Dafora posted a decline in operating revenues for the period due to the negative impact stemming from the firm’s construction activity. The company generally posts lower sales in the second quarter, with volumes picking up in the third and fourth quarters.
Operating profit came in at RON 2.8m for 2Q09, down 62.5% y/y and 33.6% q/q. The outcome was 24.2% below our estimate. The firm’s operating margin stood at 5.9% in 2Q09 versus 7.5% in 1Q09 and 10.7% in 2Q08. The company used cost-cutting measures to partially compensate for a drop in sales, although the latter was still lower than we had expected. Costs related to salaries, raw materials and third parties fared better than expected in the period. (Dafora reduced its headcount by 25% at the end of 1Q09.)
Financial loss came in at RON 2.0m for 2Q09, down 34.1% y/y, 52.3% q/q and 55.7% below our expectation.