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Pannonplast posts profit after selling assets, units

Pannonplast Nyrt, a Hungarian plastics maker that supplies yoghurt cups for Groupe Danone, said it had a profit in the second-quarter following a loss a year ago after it sold property and unprofitable units. Net income in the three months ended June 30 was Ft 555 million, or Ft 143 a share, compared with a loss of Ft 139 million a year earlier, the company said in a stock exchange statement today. Sales fell 15%, to Ft 5.3 billion after Pannonplast sold units. Pannonplast, which has struggled as slowing economic growth in Western Europe cut demand for products like television sets and plastics, posted its third consecutive annual loss in 2005. The company, which also operates in Romania and Ukraine, has been selling property and unprofitable units to stem losses. It is now focusing on consumer packaging. “The bulk of our revenue, which dropped from the year-ago period as we have sold units, came from the consumer packaging business,” Budapest-based Pannonplast said in the statement. The company also sold its 62.2% stake in its tube-producing unit Tu-Plast Kft. to Hoffmann Neopac AG in April, adding Ft 1 billion to this quarter's profit, it said. Pannonplast's unprofitable industrial plastics unit, which the company sold 80% of in December, made an operating loss of Ft 223 million in the quarter and the company incurred a one-time cost of Ft 159 million to sell the stake. The company's operating profit jumped to Ft 513 million from Ft 20 million in the year-earlier period, it said. The number of employees fell 46% to 773 by the end of the April-June period versus a year ago as the company sold units. Pannonplast in April forecast a 34% slide in full-year revenue to Ft 15 billion and said it expected net income of Ft 400 million after a Ft 253 million loss last year. The shares have surged 65% this year and closed 2.7% higher at Ft 3,300 yesterday, valuing the company at Ft 13.5 billion. (Bloomberg)