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#News

10 - 03 - 2015

FINANCIAL RESULTS OF THE GROUP URSUS IN THE YEAR 2014

Financial results of the Group Ursus in the year 2014

URSUS S.A. – the Polish brand is getting better:

RECORD INCOME AND PROFITS , PERSPECTIVE OF FURTHER GROWTHS
IN RELATION WITH INVESTMENTS IN POLAND AND THE CONTRACT IN ETHIOPIA

10 March 2015, Warsaw

Financial results of the Group Ursus in the year 2014

URSUS S.A. – the Polish brand is getting better:

RECORD INCOME AND PROFITS , PERSPECTIVE OF FURTHER GROWTHS
IN RELATION WITH INVESTMENTS IN POLAND AND THE CONTRACT IN ETHIOPIA

URSUS S.A., the biggest Polish producer of tractors and agricultural machines with over 120-year tradition of mechanization of Polish agriculture, showed record income and good profits in the year 2014. The company plans further growths in connection with development of the offer, investment in production facilities in Lublin and perspective of execution of another stage of the contract for sales of tractors to Ethiopia.   


Unit financial results of URSUS S.A.

 million PLN

I-IV quarter 2014

I-IV quarter 2013

Change year on year

Sales

224,1

147,9

+51,5%

Gross sales income

42,2

14,6

+189,5%

Operating profit

21,3

-21,3

-

Net profit

14,9

-22,5

-

 

 

 

 

  

 

 

The results of the year 2014 comply with our assumptions: we showed the record income of 224,1 million PLN and over 21 million PLN EBIT, what allowed reaching 15 mln PLN of the net profit.  These results confirm the validity of the concept of reconstruction of the Polish brand  URSUS and its domestic and international potential – comments Karol Zarajczyk, the President of URSUS S.A. 

RECORD INCOMES OF THE COMPANY URSUS

In 2014 URSUS S.A. reached the record increase of 51,5% year to year of the income up to  224,1 million PLN, i.e. derivative of the foreign sales of 142,9% inter alia in relation with execution of the contract in Ethiopia (122,2 million PLN). The domestic sales in this period was 102 million PLN, i.e. increase by 4,3% year to year – result of the lack of funds to finance the purchases of machinery for agriculture within the programme PROW (Rural Development Programme). In this period the company made use of its production capacity of its production plants for execution of the Ethiopian contract, which resulted in the limited production capacity for the domestic market.  

The year 2014 summarizes 3-year period of investments in development of URSUS brand in this time we successfully introduced in our offer 9 new products, including 7 models of  tractors in the most popular power range 50-180KM, we developed production and R&D facilities. We are gradually reconstructing the position of the brand URSUS in Poland and   in new foreign markets – adds the President Zarajczyk. 

PRODUCTS’ DEVELOPMENT, EXPANSION INTO NEW MARKETS  

In years 2013-2014 the company introduced in its offer 9 new products, including 7 models of  tractors in the power range 50-180KM, the most popular tractors for small and medium farms and for the sector of forestry, construction and urban services. In 2014 the company reached an increase of 125% year to year in sales of its flagship products, i.e. tractors, derivative of the increase of foreign sales. The segment of trolleybuses showed an increase of 20% year to year in sales to the amount of 19,5 million PLN – result of execution of a part of the contract with ZTM in Lublin. In 2013 URSUS concluded with the Public Transport Authority of Lublin (ZTM) the contract for purchase and delivery of 38 new low-floor urban trolleybuses of maxi class in years 2013-2015.

In 2014 the company focused on further development of its foreign sales in countries like: Czech Republic, Slovak Republic, Hungary, Belgium, Slovenia, Croatia, as well as Scandinavian and Eastern countries. Results of development of the foreign sales are evident also in the markets outside Europe. In 2013 URSUS S.A. concluded with the Ethiopian company METEC the contract for delivery of tractors, equipment for servicing centers and spare parts for tractors. Last year, the company executed fully four lots of the first stage of the contract. The sales value in frames of the contract in 2014 was 84,6 million PLN. Now URSUS is executing the subsequent fifth delivery of the first stage of the contract. The total amount of the concluded contract is 90 million USD.


The contract with the company METEC is the key contract for the brand URSUS. In the framework of execution of this contract the company developed also its range of products, with new tractors tailored to customers’ expectations in Poland and abroad. – said Karol Zarajczyk, the President of the Management Board.

SIGNIFICANT GROWTH OF PROFITS

Execution of the strategic objectives had an impast on the results in 2014. In 2014 the gross sales income was about 42,2 million PLN, i.e. 189,5% of increase year to year and 18,9% of margin at this profit level. EBIT increased to 21,3 million PLN compared with the corresponding amount of the loss in 2013, i.e. 21,3 million PLN. The margin EBIT was 9,5%. The net profit in 2014 was 14,9 million PLN.

The improvement of the results of the Group are a consequence of execution of the development strategy and restructuring activities, which allowed to reduce the costs of sales by 36% year to year.

DEVELOPMENT PERSPECTIVES IN 2015 

Last year the company allocated about 17 million PLN for development of the offer and construction of its production facilities. This year URSUS plans to allocate another 24 million PLN for investments.

Development of production facilities and URSUS R&D in Lublin  

In 2013 URSUS concluded with PARP an agreement in the amount of 8 million PLN for co-financing the project of construction of a modern laboratory R&D, aimed at increasing innovation of production processes and competitiveness of the company’s offer. The total value of the project is about 23,6 million PLN and it will be executed by the end of the first half 2015. The center for research and development URSUS R&D was established in 2010 and cooperates with engineers from Lublin University of Technology and the Military University of Technology in Warsaw. One of the first actually executed projects of URSUS R&D is construction of urban electric bus for Lublin. This project is executed by the consortium with the Public Transport Authority of Lublin and Lublin University of Technology.

The company plans also an investment in equipment of the production plant in Lublin. In 2014 the company designated 5,6 million PLN for modernization of the production which this year will be equipped with modern R&D equipment. This investment in years 2014-2015 will cost about 16 million PLN.

Development of production and R&D facilities is one of our strategic priorities. We would like to use the strength of the brand and potential of Polish engineers and designers to establish in Lublin a modern research and production center, with a view of rebuilding the tradition of Polish automotive industry, going back to the pre-war years, stresses Karol Zarajczyk, President of URSUS S.A. 

Executed contracts  

The last lot of trolleybuses, i.e. 19 pieces of trolleybuses is to be executed in the framework of the agreement with the Public Transport Authority of Lublin. According to the contract with METEC, the company shall start execution of the second stage of the contract for supply of tractors to Ethiopia (1.500 tractors) of the total value about 45 million USD.  

In 2014 the company concluded a license agreement with the company FarmAll Technology. This agreement for use of the brand URSUS in sales of tractor in the territory of Pakistan and technical support give the Group access to  new attractive markets in that region and potential revenues in 2015 and in the subsequent years.  

Potential of new projects

In 2015 the Management Board assumes a continued development of the company by extension of its product offer. Another sales lever shall be the system of co-financing purchase of agricultural equipment with means of the EU funds: the budget of the programme PROW for the years 2014-2020 approved in December 2014 by the European Commission in the amount of 13,5 billion  EUR, including euro, z tego 4,9 billion  EUR of the national contribution.

This year the Group plans further expansion in Poland in relation with a wider offer of tractors and its adjustment to expectations of the Polish customers.

Actually URSUS S.A. offers a comprehensive range of tractors in the assortment groups of the highest sales rates, mainly tractors in the medium power range, what should  translate into an increased income in Poland. Within the international expansion, this year the company  intends to develop its sales in the EU countries, in the Eastern Europe in Balkans and in Africa. URSUS assumes promotion of its offer at different fairs and international exhibitions, which should have a positive impact on increasing the export sales. Restoring splendor of the oldest Polish brand is the objective of the Management Board and the priority of the strategic investor of the company.   

For futher information please contact:

Mariusz Lewandowski

Press Officer URSUS S.A.                                                                       

Tel: + 48 544 271 101                                                                                  

mobile.: + 48 669 060 051                                                                               

mariusz.lewandowski@ursus.com