Finance
Important investments for the future
2007 was not a financial top year. This was partially owing to arranging an important part of the organisation around the production and sales of biodiesel, which will only bear fruit later. The installed cost structure bore heavily on 2007 as a whole without generating a lot of bonuses; those are expected in 2008. Investments of about 23 million euro are financed in different parts. The investments fit in with Proviron’s philosophy to become a chemical company of the new generation.
2007 was – like 2006 – a turning-point year. We have decided to develop biodiesel production and commercialisation, and on broader scale, we intend to increase our chemicals production on the basis of renewables.
Investments
Sales, Operating profit & Operational cash flow
Costs
The raw materials boom hasn’t really weakened but at least the costs didn’t continue to increase. The “low dollar effect” only partially influences our result. Our European cost structure is so heavy that even a “cheap” dollar isn’t very advantageous. Countries and producers traditionally operating in a dollar structure are now more than ever competitors.
Grounds and buildings
Partially based on recent property transactions of neighbouring plots Proviron decided to express the value of its grounds in its accounts. The majority of these plots are not used for industrial activities at the time and are therefore convertible.
Activity mix
The almost traditional Proviron activity mix of about 40 % own products and about 60 % toll manufacturing has hardly changed. The first part is more susceptible to raw material costs and market prices, and thus to volume availability, which holds an increased operational risk. The toll manufacturing part has quite a different profile which offers stability to the company, making it less susceptible to market fluctuations.
Proviron was able to enter into a number of new contracts which will not miss their positive effect in 2008 and beyond.
Organisation
2007 saw the completion of the planned company reorganisation, the results of which will be noticeable to the full in 2008. An important and unchanged aspect of our financial organisation is the proactive collections with customers. This brings in positive results year after year.
Capital increase
Increased costs is partially owing to seriously higher personnel costs – e.g. for the biodiesel equipment – and a conscious choice for an enhanced maintenance effort. Following the important investments in 2007 Proviron will increase it’s equity and lower financial debts.