Butan Gas Romania, a leading player on the liquefied petroleum gas market, derived income standing at 400,000 euros in the first six months of this year, four times smaller than the figure reported in the similar period of last year.
"Though international quotes of oil products have shot up since the beginning of the year, the increase has had a negative impact on us. This has happened amid a failed transfer of margin gaps. Product purchase costs went up, while sale prices could not support the same increase," explained the company's representatives.
Butan Gas Romania is the domestic branch of Italy's Butan Gas international group, controlled by Romanian businessman Iosif Constantin Dragan, according to the latest information available.
A similar thing happened in the first half of this year on the market of refineries and filling stations, where profit margins plunged, too.
The LPG operator's business stagnated in the first half at the level of last year, namely 23 million euros.
It was the increase in sales volumes and maintaining prices unchanged despite higher costs that caused Butan Gas to stagnate.
The LPG market includes three segments - cookers (gas cylinders), small bulk and auto LPG. "At present, the segment of gas cylinders is shrinking, but the decline is offset by rising sales on the segment of auto LPG. The small bulk sector stagnates," stated the above-quoted sources.
Romania's LPG business has expanded rapidly over recent years, getting to 300-320 million euros, according to some estimates.
Butan Gas at the end of last year registered income worth 4.03 million RON (1.11 million euros), after having logged losses standing at 2.43 million RON (0.7 million euros) in 2004.
The LPG operator's turnover rose by approximately 30% from 2004, reaching 156.67 million RON (43.5 million euros).
The company has a market share of around 21%, according to its own estimates. The company's majority shareholder is Butan Gas Spa Milano, with a stake of over 90%. Propan Gas AG Viena and Eurofina Romania hold minority stakes in the company. Petrom owns around 6% in it, down from the 8% held a year ago.
Iosif Constantin Dragan, who founded Butan Gas group, is one of the richest Romanians, with a fortune put at approximately 800-850 million dollars (640-680 million euros). The group was set up in 1948.
The domestic LPG market is controlled by five major companies, namely Shell Gas Romania, Petrom, Butan Gas, Rompetrol Gas and Crimbo Gas. Petrom, Romania's biggest company, owns stakes in another two competitors. The oil company owns 45% in Shell Gas Romania. The auto LPG market is fastest growing of all, likely to amount to go up by as much as 10% this year. Auto LPG is 50% cheaper than petrol and diesel on the average.
Butan Gas Romania
A leading player on the market of liquefied petroleum gas
The domestic branch of Italian international Butan Gas group, controlled by businessman Iosif Constantin Dragan
Posted profit worth 400,000 euros in the first half of this year, four times smaller compared with the similar period of last year
The business stagnated in the first year-half at the level of last year, namely 23m euros, as sale prices remained flat amid rising costs.
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