Supervisory Board of KONČAR – Electrical Industry Inc. considered and adopted Consolidated Financial Statements of the Company for the first half of 2020.

Despite numerous negative effects caused by the COVID-19 pandemic (increase in the prices of raw materials and transport services, difficult contracting of new deals due to travel ban and restrictions) the KONČAR Group managed to maintain a positive business trend in the second quarter, thus confirming the fact that the company is agile enough and able to adapt to unforeseen and emergency situations due to the commitment of its employees.

KONČAR Group generated a total income of HRK 1,426 million in the first half of 2020, which is 12.1 percent more than in the same period last year. Income from the sales of products and services, which accounts for 97 percent of the total operating income, amounts to HRK 1,341.2 million, which is an increase of 11.1 percent. Sales in export account for 67 percent of the sales income. New deals in the amount of HRK 1,486.3 million were contracted, of which 72 percent in foreign markets. The deals contracted in 2020 and deals contracted in previous years to be implemented in 2020 are sufficient for generating the planned income from the sales of products and services this year.

Group-wide business estimates for the rest of the year have been made. Sales income is expected to increase by approximately 4 percent compared to 2019. The balance of the backlog of liabilities at the end of the year would amount to around HRK 3.7 billion.

As the contracting and production cycle in most companies takes place over a longer period of time, the possible negative impact on the Group’s operations caused by coronavirus primarily depends on the duration of the crisis. It is currently not possible to adequately assess and quantify the business consequences in the next and subsequent years.

The priorities of the KONČAR Group in the period ahead are primarily the protection of the employees’ health and safety, while continuing with sustainable operations. Secured liquidity, a stable balance sheet, a low level of indebtedness, and a good number of business arrangements for the coming period will certainly make it easier to face further consequences of the crisis.