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Videoton sees revenue falling no more than 20% in 2009

Hungarian electronics manufacturing services company Videoton expects consolidated revenue to drop no more than 20% in 2009, as order volume falls, CEO Ottó Sinkó said.

Videoton expects unit volume to drop 30%-40% in 2009, Sinkó said.

Péter Lakatos, Videoton's other CEO, said turnover would drop because of big stocks in Europe. Videoton is trying to adapt to the new conditions, but this would require a stable and appropriate exchange rate, a calculable cost structure and stock of orders, and lower labor costs, he said. The crisis is 20-25% over, Lakatos ventured, and Videoton aims to come out of it stronger than its competitors.

Answering a question, Lakatos said a HUF/EUR exchange rate of 260-290 would be good for the manufacturing and industrial sector. Sinkó put the ideal rate between 270 and 280.

Videoton's consolidated revenue fell 5%-10% in 2008 from HUF 97 billion in 2007, Sinkó said. Pre-tax profit dropped to around HUF 7 billion from HUF 8.4 billion.

About half of revenue came from automotive industry orders, about 20% was from household appliances and more than 10% came from industrial electronics. The rest was from computer, office and entertainment electronics, as well as telecommunications equipment.

Videoton's staff has been reduced to 7,000 from around 7,800 in the middle of 2008, Sinkó said. When asked if further layoffs were planned, Sinkó said he could not answer. The company has introduced a four-day work week, he noted.

Videoton has signed a contract with a partner to make products with “limited risk” in terms of demand, and requiring little machinery and cheap labor, from April, Lakatos said, without revealing any further details.

Videoton is owned by Sinkó (26.5%), Lakatos (26.5%) and Gábor Széles (47%). (MTI – Econews)