Parts maker Raba said it would increase revenues by around 12% in 2005 year-on-year but its biggest division, axles, would still make an operating loss, according to Reuters.

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Raba reportedly said it is aiming for revenue of over 45 billion Hungarian forints ($US230.4 million) in 2005, compared with 40.16 billion last year, and also expects a positive EBITDA (earnings before taxes, depreciation and amortisation) margin this year, but, even though first quarter net loss narrowed to 1.52 billion forints from 2.73 billion a year earlier after it nearly halved operating losses, a financial loss of 631 million forints dragged down results.


Reuters reported the company would have sales of 200 million euros ($256.9 million) by 2007, excluding the vehicle division, but demand in Raba’s key US market might stagnate or drop in 2007 as scheduled changes in environmental regulations prompt clients to stock up parts in 2006 and postpone orders in 2007 until the effect of the changes become clear.


Sales at Raba’s vehicle parts division will grow by 10 to 15% in the second quarter of 2005 compared to January-March as production grows at the Hungarian unit of Japanese car maker Suzuki, to which Raba supplies car seats, the report said.


Susuki is ramping up production of its first redesigned Swift in about 16 years, and the new model is attracting favourable reviews in Europe whose markets are supplied from Hungary.

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Raba’s raw material costs rose 45% year on year because of high steel prices and because its previous main supplier in Hungary went bust last year, forcing Raba to switch to more expensive Italian and Czech suppliers, Reuters added.