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Rigas Kugu Buvetava shipyard posts EUR 169,000 in audited 2016 profit; auditor corrects result

BC, Riga, 25.04.2017.Print version
Rigas Kugu Buvetava shipyard closed 2016 with EUR 20.758 million in audited turnover, which was a 2.1 percent drop from 2015, while the company’s profit contracted 23.6 percent year-on-year to EUR 169,807, according to the company’s report to Nasdaq Riga.

In 2016, revenue form ship repair was EUR 15.522 mln, down 10.5% from 2015, and revenue from shipbuilding was EUR 4.999 mln, up 41.6% against 2015. Revenue from mechanical engineering declined 30.1 percent y-o-y to EUR 226,100.

Orients Audit & Finance, which audited the company's 2016 performance results, made some corrections, though. The auditor indicated that company's balance sheet included a EUR 1.2 mln investment in the capital of associated company Remars Granula, which is a purchase expense of this investment. At the same time, the balance sheet also contains a EUR 1,293,464 debt receivable from the aforementioned company, which had significantly delayed the payment.

The auditor indicated in its report that the loss from this investment and the possible reduction of the debt's value was not recognized in the company's financial statements.

In 2016, Rigas Kugu Buvetava repaired 71 ships, which was two vessels more than in 2015, as well as built and launched three new ship hulls, which was below the target as the clients failed to provide funding for the shipbuilding projects on time, Rigas Kugu Buvetava said in the financial report.

“As a new segment of our production range is industrial metal constructions. The Company's Board and specialists dedicated a lot of time and energy to get the company certified and receive real orders for this market sector. In 2016, upon receipt of positive references, the Company delivered an order, which consisted of 2 metal reels with a diameter of 8.5 meters and 7 metal reels with a diameter of 5.7 meters. Currently under negotiation is receipt of the next orders. This new production sector allows maintaining at the high level Company’s technical personnel’s professional qualification, as well as to align workforce capacity during the winter months and generate extra revenue,” the shipyard’s management said in the report.

The company’s management also indicated that the products and services, as well as the principal raw material suppliers have not changed. Shipbuilding customers are mainly from Scandinavian countries, ship repair – Western ship service agencies and shipping companies. The main materials and spare parts suppliers are the companies registered in Latvia and in the European Union.

In 2016 Joint-Stock Company Rigas Kugu Buvetava continued its investment program, which was launched during preceding years. In 2016 investments amounted EUR 1.7 mln.

In 2015, Rigas Kugu Buvetava generated EUR 222,182 in profit on EUR 21.199 mln turnover.

Rigas Kugu Buvetava's largest shareholder is Remars-Riga (49.86%), several private individuals (34.73%) and other limited companies (15.41%).

Shares in Rigas Kugu Buvetava are quoted on the Secondary List of the Nasdaq Riga stock exchange.

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