Vulcan posted RON15.5 million (EUR3.7 million) in losses in the first half of this year and over EUR20 million in losses over the last few years.
Vulcan’s difficult situation has been reflected in its stock exchange performance, with the company’s market value falling four times in less than two years, to a current EUR1.9 million. In 2007, Vulcan was worth EUR48 million on the stock exchange.
Ovidiu Tender tried to bring the power plant boilers manufacturer back on its feet by recruiting at the beginning of 2008 a team of Austrian experts to restructure the business.
He set up Vulcan International, which was managed by the Austrian team, which handled the company’s export orders. In the wake of these steps, Vulcan tentatively returned to profit in 2008 and 2009, but over the past year and a half reported significant losses again.
“Vulcan needs to be brought back on track. It is not in the best shape, but neither is it in the worst shape. The business model and the strategy need to be changed. Clients need to be our primary focus. The best example is that three years ago the company had orders to cover 40-60% of its production capacity, whereas now and up to the end of the year, it has orders covering 110-120% of its production capacity, which means orders are covered and there are very good signs of a financial recovery and of a return to profit,” said Volintiru.
Volintiru was previously financial manager in several major companies such as the Relad group, Rompetrol Rafinare, Rompetrol Downstream, the Vega refinery, Rebu and Marine Resources Exploration International.
“Last week we had a crucial audit from OMV Vienna and it appears we have come out very well. We remain involved in a very big business with them next year, and orders from them have increased significantly,” Volintiru adds.
Vulcan delivers pumping units and spare parts to OMV, which is one of the company’s main clients. Vulcan exports around 68% of its production, and has major international companies such as Volund, Keppel Seghers, Babcock, Metso and Dow Chemicals as partners.
Volintiru said he took the decision to outsource support services to French group Vinci, which is set to bring around 10-15% savings in administrative, security, cleaning costs and other support activities.
He explained that the big losses recorded by Vulcan over the past few years were due to the fact that production flows have not been rendered more efficient. “There were bottlenecks along the production flow. Projects were delayed, delays generate costs, so profitability was lost.”
For this year the company expects a turnover of RON125 million after ending the first half with a turnover of RON21.2 million. In 2012, it wants to achieve sales of over RON200 million.
The Vulcan management also says the company is set to make operating profit in around two months’ time with the company to return to profit as early as next year.
Vulcan is controlled by Ovidiu Tender through the Energetic Tender group, which holds 73.2% of the shares. (EUR1=4.2710)
(English version by Daniela Stoican)