Zagreb, Sept 8 - Croatia's top food group Podravka expects to show better results at the end of this year after a campaign to cut costs, the company's new CEO said on Monday.
Podravka is listed on the Zagreb bourse and analysts say it has underperformed for years, failing to win new markets, launch products or implement restructuring efforts.
"Naturally, I cannot come out with figures, but I'm confident our operational results this year will be much better than in 2007. We have made serious efforts to cut 'nice to have' items and keep only 'must haves'," Zdravko Sestak told reporters.
Podravka, which operates in southeastern, central and eastern Europe, changed management this summer when Sestak took over. The government is the biggest single shareholder with a stake of almost 27 percent, which it wants to sell but has not yet made concrete plans to do so.
"We have undertaken changes in organisational structure as we are making effort to boost profitability and efficiency. We also have to rearrange our production mix in order to create potential for those products that can be more competitive," Sestak said.
Podravka's more than 1,000 products include powdered food seasoning Vegeta, soups and meals, pasta, canned meat and children's foods. It also has a profitable pharmaceutical arm.
Sestak said restructuring might include reducing its workforce of some 7,000.
Podravka's net profit last year amounted to 18.3 million kuna ($3.7 million), down from 60.4 million in 2006. In the first six months of this year the company had net earnings of 22.9 million.
Sestak said Podravka was eyeing acquisitions in markets where it is already present. "We're working on acquisitions on our key markets and in some cases we're close to a deal. I cannot say more at this stage," he said.
Podravka's shares were quoted 3.3 percent lower at 353 kuna in early afternoon trade.