Having shown a profit for the last couple of years, Slovakia's largest wireworks company, Drôtovňa Hlohovec, ended 1998 3.5 million Sk ($90,000) in the red. In 1996 the company netted 62.2 million Sk, while in 1997 it earned a gross profit of 46.7 million Sk.
The company's unfavourable performance last year was a consequence of the recession in the building industry, the de facto devaluation of the Slovak currency and an incorrect business strategy, Jozef Špirko of the Drôtovňa board of directors said on February 22.
The recession in the construction industry also caused a corresponding drop in Drôtovňa's sales, chiefly in the second half of the year. "Last year we had to create a reserve for exchange rate losses amounting to 42 million Sk, but the purchasing department failed to react to the fall in the prices of input materials," Špirko explained.
Drôtovňa's 1998 output was 2.2 billion Sk, of which 51% was exported. Its most significant trade partners were Germany, the Czech Republic, Austria, and Romania.
The company produced 15,000 tonnes of cables worth about 900 million Sk. Drôtovňa invested 68 million Sk last year, mainly for the reconstruction of its computer network and the completion of a modernization project for steel cable production.