So far deeply loss-making company AERO Vodochody a.s. (AERO), which in the long run is not able to cover even its current costs, will again show profit from January 2008. “Our aim is to make AERO healthy, profitable and in all respect competitive company as soon as possible. AERO must not only become able to cover its current costs, but also ensure expected return of capital to its owner,” says Mr. Petr Ondro, AERO President. From January 2007, 100 % of the AERO shares are owned by the private equity group Penta.
AERO Vodochody a.s. has so far been showing loss in the amount of approx. 40 million Czech crowns (CZK) monthly. The total loss of the first half of 2007 should reach up to 240 million CZK. According to tentative results, the loss of the year 2006 will amount to approx. one billion CZK; in 2005, the total loss was shown in the amount of 1,377 billion CZK. AERO has in the long run been showing negative equity, which by December 31, 2006 reached the amount of -7,304 billion CZK (compared to the basic capital of 2,691 billion CZK). The accumulated losses from previous periods should (according to tentative results to the same date) reach a total amount of 9,243 billion CZK.
The project of changes will be elaborated to the level of individual departments of AERO not later than March 31, 2007. Economies will be searched for in all spheres – indirect, material and personal costs as well as costs for energy and services must fall down. The Company will optimize and increase efficiency in all its activities, production will be joined in some workplaces. On the other hand, AERO will significantly mount up its investment volume this year. “We are planning to invest 150 million CZK into purchase of new and modification of current technology,” notes Peter Ondro. In 2006, the AERO investment reached 58 million CZK.
“The restructuring project will include rationalization of the current 1644 employees by approx. 450 positions by August 31, 2007 latest. The rationalization will not, excluding fixed-term contracts, include production workers, the involved will mainly come from non-production technical-economic professions,” says Josef Fogl, AERO HR Manager.
“We are not closing any production activity. Technological minima, necessary for potential orders for L-159 and Ae 270 aircraft, will also be preserved. It is, however, necessary to reduce the number of employees in order to make the production and related activities effective. We are not counting with any further rationalization of employment at this moment,” adds Peter Ondro.
“We will provide the laid-off employees with targeted and individually oriented support in cooperation with employment offices. We are preparing the opening of an in-house employment office directly in AERO. We will provide schooling for successful search for new employment, arrange meetings with employers interested in the very professions, furthermore internet office, personal and legal aid bureau and other services will be at disposal,” describes Josef Fogl.
“I believe that we will succeed in filling AERO with work, that production and development capacity will be maximally occupied in the context of aerostructures growth, L-159 aircraft marketing on foreign markets and other projects. Together with new orders, re-increase of employment can be expected, in the production division of course,” says President Peter Ondro adding that AERO is negotiating with several entities interested in production in AERO. “This year, we are expecting increase in the volume of S-76C helicopter production by a fifth compared to 2006, the C-27J Spartan military transport aircraft center wing box production line will be launched, we will deliver four two-seat L-159 aircraft to the Czech Air Force,” Peter Ondro enumerated several production activities.
AERO Vodochody a.s. is the largest defence company and the largest aircraft technology producer in the Czech Republic. AERO has produced around two thirds of the whole-world production of military jet training aircraft (L-29, L-39, L-59, L-159). Nowadays, the Company’s revenue is mainly made by Aerostructures programs (subdeliveries for other producers) with Sikorsky Aircraft Corporation (S-76C Helicopter Production), Vought Aircraft Industries (B747 Parts), Boeing St. Louis (F-18 E/F Gun Bay Door), EADS (A320 and A340 Subassemblies) or Spirit (B767 Fixed Leading Edge Kits).
Penta Group has become 100% owner of the shares of AERO Vodochody a.s. on January 4, 2007. Penta is a Czech-Slovak private equity group, established in 1994. Penta deals on the Czech and Slovak markets with acquisition of large and middle-sized companies, their subsequent restructuring and increase of its value. Penta also progressively penetrates further Central and Eastern European markets. Assets administered by Penta exceed €850 million. Penta employs more than thirteen thousand people in its subsidiary companies.
Source: AERO Vodochody
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