Zorbas profits increase

A. Zorbas & Sons Public Co. Ltd. (ZRP) reported a 30.5% increase in turnover reaching CYP 26.0 mln in 2004 on the back of higher revenues per shop and the operation of six new outlets. The increase in turnover was driven by higher revenues per outlet, which increased from CYP 738.000 to CYP 788.000 in 2004, according to Egnatia Financial Services. ZRP operated 6 new shops in 2004, which brings the total number of outlets to 33 against 27 in 2003.

Gross Profit reached CYP 10.02 mln, up by some 30.2%. Despite the increase in gross profit, the gross profit margin fell marginally by 10bps to 38.5%. This decrease reflects the marginal change in the Company’s sales mix from high yield bakery products to lower yielding non-bakery products.

Operating expenses increased by 31.7% to CYP 7.18 mln. As a percentage of turnover, total operating expenses deteriorated by 25bps at 27.6%, primarily due to rising fuel and electricity prices as well as higher depreciation charges from the operation of 6 additional outlets compared to 2003. Consequently, earnings before interest and tax was recorded at CYP 3.07 mln.

Net Finance charges rose to CYP 130.000. This relates to the higher

interest charges arising from the increase in the Company’s long term loan facilities.

Net profit after minority interest was strong at CYP 2.51 mln up by 28.9% year-on-year. Net profit was positively affected by a lower effective tax rate (13.6% in 2004 against 15.1% in 2003). Net profit margin declined marginally from 9.7% in 2003 to 9.6%. Earnings per share were reported at 16.38 cent against 12.81 cent in 2003.