The Bega group, held by brothers Marius and Emil Cristescu, posts annual turnover in excess of EUR120 million.
The group’s business was significantly affected by the crisis in the last two years. In 2008, the best year for the Bega group, turnover amounted to around EUR250 million, according to company representatives.
“In the first half, turnover stagnated because there was one additional month of cold weather, but over the whole year I think we will grow by 10% – 15%,” said Marius Cristescu. “Faur Bucuresti and Bega Tehnomet performed well because their production is exported. At Bega Tehnomet, for instance, this is the first time we have production ensured for next year, as well,” he added.
Seven out of the eight companies held by the Cristescu brothers, which are listed on the RASDAQ market, recorded a turnover stagnation in the first six months, i.e. around RON92 million (EUR21.6 million).
On the other hand, the same companies’ profitability improved substantially, so that they reported cumulated profits of RON7.8 million (EUR1.8 million) in the first half, compared to profit of just RON0.1 million (EUR0.02 million) in the similar period of 2010, show stock exchange data.
Cristescus’ stock exchange-listed companies have a cumulated market value of RON680 million (around EUR160 million) but a very low liquidity because the two businessmen hold almost all shares and have continued to accumulate significant stakes lately.
The most valuable company of the group is Bega Turism Timisoara (SCDE.RO), the company that owns the Timisoara five-star hotel in Timisoara (Western Romania), with a capitalization of EUR36.6 million. The hotel has recently been modernized after investments of EUR10 million and the Cristescu brothers want to spend a further EUR9 million for an underground parking lot, a spa and a conference center.
Rolling stock and industrial equipment producer Faur Bucuresti (FAU.RO), also controlled by the brothers, boosted its turnover 31% in the first half, to RON14 million, and reported profit slightly up to RON1.4 million. Bega Tehnomet (TEHO.RO) recorded a 51% turnover increase in the same period, and substantially boosted its profit to RON1.5 million (EUR0.3 million).
Several companies held by the Timisoara businessmen approved the transfer of shares from the RASDAQ market to the regulated market of the Bucharest Stock Exchange, or BVB, but Marius Cristescu says he will put off the process because of external turmoil.
“I will definitely not list the companies on the stock exchange this year, probably next year. I think turmoil affecting the markets will continue for at least two more months and these are not good times for listing. The only things that will affect Romania during this period are the higher interest rates and the lower borrowing power of the state and companies,” Cristescu believes.
The Cristescu brothers hold around 30 companies in several sectors through the Bega group. The sectors include the chemical industry (Begachim, Chimforex), oil drilling (Foraj Sonde Craiova), trade (Bega Com), tourism (Bega Turism), transport (Bega Trans Auto) and real estate (Bega Imobiliare).
(EUR1=RON4.251)
(English version by Daniela Stoican; Editing by Loredana Fratila-Cristescu and Radu Bostan)