Damen Galati posts highest losses in 38 years

“We had planned some €9 million in profits for 2007. Unfortunately, the financial report, which is to be finalized by the end of the month, will show some €2 mln in losses,” the Manager told Business Standard.

More than half of these losses and the missed profit target, or some €6 mln, were due to the appreciation of the national currency in relation to the euro. Other factors added to the negative balance sheet. “Problems began in 2006, when we had to stop production for two and a half months because of the floods. The delays produced an avalanche, drawing penalties from beneficiaries of our operations,” added Stan. He said that high temperatures last summer also prevented the company from finalizing several ships.

Furthermore, the shipyard is facing a severe lack of skilled personnel, as workers migrated to Western countries. Damen Galati lost some 50 percent of its staff in the past two years and was forced to employ unqualified personnel, leading to a drop in productivity. Furthermore, an attempt to retain skilled employees led to a rise in salary costs.
The shipyard, owned by Dutch Damen Group, posted some €9 mln and 5 mln in profits in 2006 and 2005, respectively.