Rába Nyrt, a Hungarian maker of vehicle parts and military trucks, reported higher Q4 profit after sales in eastern Europe rose.
Net income for the three months to December 30 was Ft 2.12 billion ($10.9 million), compared with a loss of Ft 1.49 billion a year earlier, the company said in a statement to the Budapest Stock Exchange today. Sales dropped 2.3% to Ft 13.7 billion from Ft 14.1 billion. Rába, which exports to companies such as Deere & Co. and Caterpillar Inc., said new orders in eastern Europe bolstered sales. Earnings were also helped as the company arranged futures contracts for dollar-denominated transactions to protect against currency fluctuations. „The quarterly profit was a result of worsening foreign exchange rates and lower communal energy bills, thanks to the completion of the facility consolidation program,” the company, based in the northwest city of Győr, said in the statement.
Sales in Hungary fell 9.7% in the Q4, while exports increased 4.1%, Rába said. Exports made up 57% of revenue in the period. Rába said on December 6 it signed an agreement worth $29.4 million to supply US partner Marmon-Herrington with axles and parts. The company expects the contract to help solidify its position on the US market. Marmon-Herrington has bought Rába axles since the 1980s. The company's full-year profit amounted to Ft 3.2 billion, compared with a loss of Ft 4.8 billion in 2005, the company said. Annual sales rose 6.3% to Ft 50.3 billion. 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. (Bloomberg)