Interfax: CEE soft drink firm formed by merger of Polish Hoop, Czech Kofola to look for juice acquisitions

WARSAW. MARCH 14. INTERFAX CENTRAL EUROPE - The Central and Eastern European soft drinks firm formed from the merger of Polish listed Hoop and Czech rival Kofola - Kofola-Hoop - will look to boost its presence through acquisitions on the juice market, Hoop's Vice-President Marek Jutkiewicz told reporters Wednesday.

"We are interested in juice [makers]," Jutkiewicz said. "Together we have potential to look for and acquire companies such as Hortex [- the frozen foods and branded fruit juices producer]."

The press conference followed an announcement late Tuesday that Hoop, Poland's largest soft-drink maker and No. 3 in terms of sales volumes, with a 7.1% market share, had agreed to the introduction of leading Czech soft-drinks maker Kofola as a strategic investor. The managers of Kofola Holding, based in the Czech city of Ostrava, will be the majority owners of this new company.

Following the merger, likely to be completed by the end of the third quarter of the year, the new company's turnover is expected to come in at more than PLN 1.2 bln, according to estimates.

"It [turnover] will be higher [than PLN 1.2 bln] but we do not want to make any public obligations," said Hoop's Chief Executive Officer Dariusz Wojdyga.

Wojdyga said that Hoop had held merger talks with several companies but the deal with Kopola was the best in terms of optimizing synergy effects.

Kopola operates on the Czech, Slovak, Polish and Hungarian markets, however, has been suffering losses on in the latter two. For the full-year 2006, the company reported consolidated net income at PLN 15.2 mln, while removing results from the Polish and Hungarian markets would have given a profit of PLN 29 mln.

Kopola's sales revenues were PLN 468.5 mln for the year.

At the operating level, consolidated earnings before interest and taxes (EBIT) stood at PLN 25.9 mln in 2006, while excluding Polish and Hungarian market, the figure stands at PLN 42 mln. The earnings before interest, taxes, depreciation and amortization (EBITDA) figure - which removes two non-cash items, depreciation and amortization - came out at PLN 54 mln, against PLN 65.6 mln without results noted on the Polish and Hungarian markets.

"Losses in Poland will be quite fast suppressed thanks to cost cuts," Jutkiewicz said.

Hoop, reported PLN 18.4 mln in net income for 2006 on PLN 663.9 mln in revenues, against PLN 6.7 mln net and sales of PLN 526.6 mln the prior year.