Signs of recovery make Romi keep investment
Valor Econômico
In view of the strong resumption of the orders, mainly in the segment of plastic processing machines, Industrias Romi, the biggest Brazilian manufacturer of machine tools, managed, in the fourth quarter, to reverse the trend of sharp fall in the results and thus improve the performance in the accumulated of 2009. Nonetheless, for 2010, the forecast of the company is to keep the same organic investment in relation to last year of nearly R$ 45 million (US$ 24.3 million), without considering any acquisitions. The decision takes into account the investments in expansion made in the past that have given the company enough productive capacity to meet the demand projected for 2010.
According to the President of Romi, Livaldo Aguiar dos Santos, while the segment of machinery for plastics showed strong recovery in the end of last year, the casting segment reacted slowly - the significant improvement, said Santos, should come as of the second half. "In the casting area, for instance, we have invested to increase the installed productive capacity, 40 thousand tons a year, by 10 thousand tons. And that will be enough to meet the demand", he said.
In the area of acquisitions, Romi keeps on waiting for a response of the Board of Directors of the American Hardinge, target of an aggressive offer made on the 4th this month by the Brazilian company at the price of US$ 8 per share, payable in cash. In order to take 100% of the company, Romi will have to disburse US$ 92 million. At a first contact with the Brazilians, Hardinge, which manufactures lathes, rectifiers and machining centers, refused opening negotiations. With the announcement that Romi may register public offer for the acquisition of shares, under the same prior conditions, the board of directors of the American company decided to examine the proposal. According to Santos, the comfortable cash position of the company, R$ 225.9 million (US$ 122.1 million) on December 31st, guarantees Romi comfort in the offer.
After the results of the fourth quarter, the company maintained the projections of income and Ebtida margin for this year, which were presented to the investors and shareholders in October. Romi estimates growth between 20% and 30% in income, and Ebtida margin ranging from 6% to 12%. In 2009, the net earnings amounted to R$ 475.4 million (US$ 241.3 million), with a fall of 31.7% compared to 2008's. In the year, the Ebtida amounted to R$ 29.13 million (US$ 14.8 million), the equivalent to a 76.2% retreat. The data of the fourth quarter shows the reaction of the businesses to the crisis. From October to December, the company had a consolidated net operating income of R$ 173.6 million (US$ 88.1 million), 42.3% above that registered in the third quarter.