German automotive battery maker Varta said today that group sales rose four percent to 1.159 billion euros ($US1.04 billion) in 2001 (2000: €1.112 billion).

Despite the slowdown in the worldwide economy, group#;s operating profit improved nine percent to €60 million ($53.8 million).

In a statement, Varta said that, although sales prices fell slightly, the improved result was achieved in particular through higher sales volumes, cost reductions and productivity increases.

The operating return on capital employed rose for the sixth time in a row and achieved 20 percent. After an increase in provisions, the profit on ‘ordinary activities#; was again around €26 million.

Capital expenditure on tangible fixed assets reached a new record level of €70 million (€52 million).

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Sales of automotive batteries grew by 13 percent to €590 million (€523 million). The operating result before interest and taxes (EBIT) rose to €29 million (€27 million).

Parent company, Varta AG recorded a net profit of €8 compared with €12 million in 2000.

Considering the planned need for high levels of capital investment in new technologies, particularly for micro batteries, €4 million – half the net profit for 2001 – has been allocated to reserves with the executive and supervisory boards proposing that unappropriated net earnings of €4 million be used to pay shareholders a dividend of €0.20 per share.

Varta group#;s sales for the first three months of 2002 grew by nine percent to €285 million (€ 261 million) with € 150 million (€ 141 million) of the rise accounted for by automotive batteries.

“In 2002, we aim to achieve a further improvement in group#;s sales and the operating result before interest and taxes”, said executive board member Walther Wever, adding that this would only be possible with modest wage settlements.

Board chairman Dr. Georg Prilhofer said Varta was seeking international co-operation opportunities.

“Increasing globalisation of our business and the development of advanced products present us with ever-increasing new challenges”, he said.

“To retain our global competitive edge, we are conducting intensive discussions with potential international partners.”