Habitat Proiect Turnover Down 40%

Habitat Proiect - Iasi (RASDAQ:HBTT) has reported a substantial decrease in turnover, from 3,091,018 RON in H1, 2008 to 1,829,112 RON in H1, 2009. Construction design activities generated only 242,411 RON in H1, 2009, down from 1,914,965 RON a year before following the reorganization of this line of business last year. The amounts of money collected under this account in H1, 2009 represent payment for the delivery of contracts started in the previous years. However, revenue from rentals increased by 32.63% from 1,176,053 RON in H1, 2008 to 1,559,838 RON in H1, 2009. Other operations also contributed 28,863 RON to the turnover.

Also in H1, 2009, the company reported overall expenses in the amount of 1,286,207 RON (64.29% compared to the corresponding period of 2008), of which 1,283,678 RON as operating expenses and 2,529 RON as financial expenses. The company reported overall revenues in the amount of 1,890,024 RON (57.32% compared to the corresponding period of 2008), of which 1,810,682 RON as operating revenue and 79,342 RON as financial revenue.

The company reported an H1, 2009 gross profit of 603,817 RON for all lines of business, equal to 46.65% of the amount reported for H1, 2008. The tax applicable to the gross profit was calculated at 95,520 RON, leaving a net profit of 508,297 RON. Habitat Proiect SA - Iasi closed H1, 2009 without any overdue payments to the State or other creditors. Receivables from State entities (local councils in Iasi County and the Iasi City Council) amounted to 817,000 RON.

As of 31 December 2008, TGH SRL is the majority shareholder in Habitat Proiect SA with 94.51%. The remaining 5.48% is spread among various individuals and companies.

SC Habitat Proiect SA is a public company limited by shares established in 1991 following the transformation of the ICPROM Research - Design Institute into a commercial company specialized in architectural, civil engineering and technical consultancy. The portfolio of the former ICPROM includes a long list of civilian and urban constructions in Iasi and the surroundings. Habitat Proiect carried on ICPROM"s legacy in designing urban constructions of local and regional utility, being the most important civil engineering company in the region of Moldova. However, the shareholders last Autumn decided to terminate the line of business dedicated to design.

Upon auditing this line of business, the shareholders found that it required the commitment of significant financial resources for long periods of time (5-7 months), while the usually delayed collection of the invoices for design services was causing cash flow gridlocks. Additionally, design activities required significant budgets for software licenses (approximately 120,000 EUR at that time) in a very short period of time. Moreover, the space dedicated to this line of business was located in a very expensive part of Iasi (Copou), for which many tenants had bid substantial rent. At the moment, the space is leased to several companies, offices of Members of Parliament, restaurants and a bank, which all pay regular rent and help the company optimize cash flows, while committing minimal resources to the administration of the office space.