Corum sees loss in 2014, 30% fall in revenue

Corum Group that combines the engineering assets of Ukraine's largest financial and industrial group System Capital Management (SCM, Donetsk) assesses a 30% decline in revenue in 2014, Corum Director General Yevhen Romaschin has said.

"Revenue last year fell by approximately by one third and the company will face losses for sure. The reasons are known – last year we actually lost three plants out of six (they are located in the ATO zone) and secondly – the decline of the coal market by more than 50%, as the major part of coalmines do not work or loaded with coal," he told reporters in Kyiv on Wednesday.

He said that in the first quarter of 2015 the company plans to see profits.

"We expect that we will have profit in Q1 2015, first thanks to reduction of permanent expenses," he said.

He said that today the company managed to resolve the problem of moving its products from militant-controlled enterprises (Donetskgormash, Donetsk Energy Plant and Horlivka machine-building plant) to other sites (in Kharkiv, Druzhkivka and Kryvy Rih).

He added that Corum expects that revenue this year will grow. He said that the business plan for this year is being formed and it will be approved in the first quarter of 2015.

Romaschin said that this year the company intends to increase exports share of total sales from 35% last year to 40%, first thanks to the realization of contracts on the traditional export markets (Poland, Vietnam, Kazakhstan, Russia and Belarus).

Romaschin said that the share of Russia of total exports is up to 50%, although taking into account the current relations between the countries there is a likelihood that cooperation will be restricted. Russia has already recommended restricting cooperation with Ukraine due to risks that the contracts could fail.

"There is likelihood that cooperation in supplies of new machinery will be restricted in documents," he added.

He said that the said risks in Belarus and Kazakhstan are smaller, but supplies to the countries are small too.

Among competitive advantages in exports is the weakening of the hryvnia, which makes the company's products more competitive, Romaschin said.

Corum Group manufactures, installs and services equipment for the mining industry. The group has seven plants and repair sites in Ukraine and Russia and trade companies in Ukraine, Kazakhstan, Vietnam, Poland and Russia.