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Gorenje Profit Drops 64% as Europe’s Debt Crisis Cuts Sales

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Aug. 24 (Bloomberg) -- Gorenje Group d.d., Slovenia’s biggest appliance maker, reported a 64 percent drop in first-half profit as Europe’s debt crisis cut sales.

Net income fell to 2.3 million euros ($2.9 million) from 6.4 million euros a year earlier, the Velenje-based company said in an e-mailed statement today. Consolidated revenue for the period decreased 17 percent to 618.6 million euros.

“The debt crisis, high level of unemployment, high prices of raw and processed material” affected Gorenje operations in the first half, it said.

Its shares retreated 2.5 percent to 4.05 euros at 11:36 a.m. in Ljubljana, falling for a fourth day and extending this year’s decline to 16 percent.

Slovenia’s biggest exporter, whose net financial debt fell by 22 million euros to 424.4 million euros, will continue to reduce liabilities “by sound management of inventories and receivables, and divestment activities,” Gorenje Chief Executive Officer Franjo Bobinac said in the statement.

Gorenje, which has shifted cooker production from Finland to the Czech Republic, plans to move manufacturing of washing machines, dryers and dishwashers from Sweden to its home-town Velenje in 2013. Russia, the U.S., Australia, the Middle and Far East remain key markets to generate growth, it said.

To contact the reporter on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net