Rába Posts HUF 570 mln Loss in Q1, Pays no Dividend on 2021 Earnings
Photo courtesy of Rába Járműipari Holding Nyrt.
Hungary’s majority state-owned listed manufacturer Rába Automotive Group (Rába Járműipari Holding Nyrt.) posted a loss of HUF 570 million after the company issued a warning in late April that its Q1 2022 earnings report may announce a nearly HUF 500 million loss.
The firm tagged the “drastic” impact of hiking energy prices on its energy-intensive axle production, noting that the war in Ukraine has contributed to energy prices remaining high.
Rába said in April it had increased the flexibility of its production and introduced stringent cost management measures to mitigate the impact of skyrocketing energy prices on its business, and is now focusing on improving the efficiency of its technology and production processes.
The company also noted that passing on the “four- to five-fold” increase in energy prices to the customers by increasing what it charges for the final products it turns out was a “great challenge.”
Rába has shown caution relating to its business operations. In mid-April, shareholders decided at an annual meeting to pay no dividends on the company’s 2021 earnings but to rather place the funds into the company’s profit reserves.
In 2021, Rába booked an after-tax profit of HUF 1.3 billion, a marked improvement from 2020’s HUF 1 bln loss. However, the profit was mainly lifted by the sale of a hotel in the center of Győr for HUF 1.5 bln and by financial losses narrowing to HUF 200 mln from 2020’s HUF 900 mln.
Last year, Rába ’s revenue rose by 20% to HUF 46.4 bln; export sales accounted for HUF 32.9 bln of the total; and direct cost of sales outpaced revenue growth, climbing 22% to HUF 37.6 bln. At the end of 2021, Rába had consolidated total assets of HUF 45.2 bln and consolidated total comprehensive profit of HUF 1.28 bln.
Although disruptions and calamities in the past few months have increased the pressure on the Hungarian automotive sector, some inaugurations and investment announcements have indicated longer term optimism for the sector.
Pata József Gépipari Investment Saves 115 Jobs
Pata József Gépipari, a family-owned automotive industry supplier, inaugurated a HUF 303 mln capacity expansion by purchasing equipment and expanding its warehouse at its base in Fajsz (180 km by road south of Budapest). The investment, which was supported by a HUF 137 mln government grant, contributed to the preservation of 115 jobs.
Modine Hungária Saves 589 jobs via HUF 800 mln Investment
Modine Hungária, an automotive parts manufacturer, has opened a 3,500 sqm warehouse at its base in Gyöngyös (80 km northeast of the capital) via a HUF 800 mln investment to preserve 589 jobs. As a result of the investment, which was part of a HUF 1.8 bln investment project that received a HUF 450 mln government grant aid, the company will no longer need to rent warehouse space.
Rafi Magyarország Invests HUF 2.3 bln, Saves 536 Jobs
German-owned supplier Rafi Magyarország has announced it will be investing HUF 2.3 bln at its base in Mezőtúr (180 km southeast of Budapest) to preserve 536 jobs. The company is constructing a warehouse and is upgrading infrastructure at its base through a project that has received HUF 630 mln in government funding.
Rosenberger Magyarország Eyes HUF 15 bln Investment
Rosenberger Magyarország, owned by a German electronics maker, will be investing HUF 15 bln at its eastern Hungary bases in Jászárokszállás, Jászberény and Nyírbátor. The Hungarian firm makes electronics, chiefly for the automotive industry, and employs about 4,000 people. The company expects the investment to strengthen its competitiveness and market position.
TDK’s HUF 26 bln Investment to add 250 Jobs
Japanese giant TDK will invest HUF 26 bln in its automotive electronics capacity in Szombathely (225 km west of the capital), which will enable the production of sensors for electric vehicles. The investment, which will create 250 jobs, is supported with a HUF 6.6 bln government grant.
AVL Enters 2nd Phase of HUF 12.5 bln Investment
Austrian engineering company AVL has entered the second phase of a HUF 12.5 bln development center in Érd, on the southwestern outskirts of Budapest, by laying the cornerstone of another office building and a garage. This element of the project, which received a HUF 1.5 bln in state grants, will add 350 jobs to the currently 474-strong staff. The garage will be finished by the end of 2022 and the new office building by June 2023. The complete scheme includes a competency center in Zalaegerszeg (225 km southwest of Budapest), where the ZalaZONE vehicle test track is located, as well as an R&D center in Érd, which covers almost the entire vertical development of drivetrain systems.
Hungarian to Replace Czech Leader at BMW Group Magyarország
Zoltán Gombos, a Hungarian engineer who has been in charge of sales at BMW Group Magyarország since 2018, has become the managing director of the German car manufacturer’s local unit, replacing Maciej Galant, who is taking a position in Prague as of this month. Gombos joined the company in 2013 as a parts and services manager and has more than two decades of experience in the automotive industry.
This article was first published in the Budapest Business Journal print issue of May 20, 2022.
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