Bulgaria's Top Tobacco Maker Posts Profit Ahead of Sale

Source from:  Bloomberg 07/27/2011

Bulgartabak Holding (57B), the Bulgarian state tobacco company being offered for sale, reported a net income of 34.1 million lev ($25.3 million) in the first six months because of increased sales and cost cutting. The profit compares with a 577,000 lev loss a year ago, the Sofia-based company said in a stock exchange filing today. Revenue rose 78 percent to 46 million lev in the first half of the year from the same period a year ago. Exports rose 29.5 percent to 7.36 million cigarettes. The company didn't report second-quarter results. Bulgaria's asset-selling agency admitted three candidates to buy an 80 percent Bulgartabak stake in the country's fourth attempt in a decade to sell it. British American Tobacco Plc (BATS) and Austrian-registered BT Invest GmbH, are the only two companies that bought tender documents to submit binding bids by Aug. 29, the Sofia-based agency said in an e-mailed statement today. Bulgaria, the European Union's poorest country, is recovering from its worst recession in more than a decade and needs to raise cash to narrow its budget deficit and meet increasing social benefits payments ahead of October presidential and local elections. Moody's Investors Service raised the nation's debt rating on July 22 to Baa2, the second-lowest investment grade, from Baa3, citing the government's tight spending policy and "relative resilience" to debt crisis contagion from neighboring Greece. Bulgaria will need to raise some 500 million euros ($718 million) to refinance global bonds maturing in 2014, Bulgarian Finance Minister Simeon Djankov said in July 22 interview. Bulgartabak aims to keep its 30 percent share of the domestic market, it said. It started exports to Poland, Croatia, Israel and Turkmenistan earlier this year. The tobacco-maker is in talks to expand exports to African and Middle Eastern countries. It has six units, including four cigarette makers and a trading division. Enditem