Rába reports profit on currency

Net income for the three months to September 30 was Ft 1.95 billion ($9.5 million) compared with a loss of Ft 582.6 million a year earlier, the company said in a statement today. Net financial gains were Ft 2.14 billion after a loss of Ft227.6 million in the same quarter last year. Rába, based in the northwest city of Győr, exports to companies such as Deere & Co. and Caterpillar Inc. and arranged futures contracts for dollar-denominated transactions to protect against currency fluctuations. That's helping earnings this year after leading to losses in 2005, while new orders in Hungary and eastern Europe bolster sales. “Rába's medium-term strategy is continually yielding improved operations, higher revenue and improved results quarter by quarter,” the company said in the statement. In Q2, Rába's loss almost halved on sales to Russia and elsewhere in the region.

On August 31, Rába said it won a Ft 2.6 billion contract from the Hungarian unit of Japanese carmaker Suzuki Motor Corp. to supply seat covers and foam. Sales in Hungary increased 18% in the Q3, while exports were up 7.9%. Revenue overall advanced 11% to Ft 11.5 billion, Rába said. Exports made up two-thirds of revenue in the period. Shares of Rába were up 0.4% to Ft 990 at 9:56 a.m. in Budapest, giving the company a market value of Ft 13.3 billion. The stock is up 64% this year. Rába was on the brink of bankruptcy in 1990 after its traditional Soviet markets collapsed, before turning westward to become Hungary's biggest exporter to the US five years later. Demand then waned as economic growth slowed, leading to a record loss of Ft 7.5 billion in 2003. Rába shares are trading below the Ft 1,475 at which they debuted on the market in December 1997. (Bloomberg)