Austria & Hungary: Ottakringer to realize capital hike at struggling Pécsi Sörfőzde brewery

Austrian brewer Ottakringer has injected Ft 831 million (€3.39 millio) in capital at its majority-owned Pécsi Sörfőzde (PS) brewery in southern Hungary, MTI – Econews reported May 20.

Ottakringer will use Ft 325 million of the capital injection to cover Pécsi Sörfőzde's operating costs and the remaining Ft 506 million to raise the brewery's net assets

PS sustained after-tax losses of Ft 789 million in 2007, the brewery's highest annual loss ever.

PS ownership representative Istvan Wenckheim told the daily Világgazdaság that “We have entered a new era will do everything we can to save the brewery.” Wenckheim noted that the brewery's management has been changed entirely since the beginning of the year.

Világgazdaság reported that PS’s owners believe that the brewery could again become profitable as early as 2010.

PS has sustained progressively higher annual losses since last turning a profit in 2002, the newspaper wrote.

Company manager and financial director Thomas Traser told Világgazdaság that PS’s new management intends to bring the brewery's production of brand-name beers, which accounted for 65% of 2007 output, into balance with production of its traditional beers, such as Szalon, in order to cut production costs.

Traser said that rationalization of PS’s operations does not imply that there will be significant number of layoffs at the brewery.

Világgazdaság reported that Pécsi Sörfőzde's cost-saving efforts have already produced results, with the brewery having posted a year-on-year 40% increase in Q1 earnings and reduced its debt by Ft 500 million over the past six months.

PS projects after-tax losses of Ft 265 million in 2008, Világgazdaság reported. The brewery targets revenues of Ft 7.93 billion in 2008, compared to Ft 7.15 billionn, the newspaper wrote.

20 May, 2008