Alliance reports Growth

Alliance has released its second quarter financial results, showing a second straight profitable quarter after a succession of 11 negative quarters. Net income amounted to $1.2 million, compared to a $1.1 million net loss in the parallel quarter of 2003. The figures also showed a 30 per cent growth in sales in the first half of 2004 to $ 63.7 million.

Net income in H1 2004 amounted to approximately $3.6 million, compared to a loss of $6.7 million in 2003.The company claims that the “positive profit turnover,” was a result of structural changes, efficiency, expanding worldwide markets, and world market conditions.

Israel (Isia) Tchetchik, chairman of the board of directors, said: “If in the first quarter we thought it was early to talk about a turnaround, the second successive profit quarter pinpoints the fact that Alliance is experiencing financial growth.”

Alliances’ revenues in the second quarter of 2004 grew by 23 per cent, to $31.6 million.
First half revenue grew 29 per cent, to $63.7 million. The company’s backlog orders increased in June 2004, to $14.3 million compared to $7 million on 30 June 2003.

In the export market, which represents 77 per cent of the company’s total sales, sales increased 38 per cent to $49 million, mainly in the European market, where Alliance holds a large share of the market for agricultural radials and flotation tyres. The company attributes aggressive marketing activity in Latin America for its 144 per cent increase in the market (mainly in Brazil and Argentina) and resulting $6.1 million in sales.

Operating profit increased 338 per cent to $5.3 million, which is 8.3 per cent of sales. Gross profit grew 55 per cent to $15.6 million. Production cost increased 16.7 per cent to $44.6 million, compared to the first half of 2003, and the company’s output increased 22 per cent to a production of 18,124 tons in the first half of 2004.