Банкеръ Weekly



The main indicator that will focus the attention of both the managers and the shareholders of Sunny Beach AD in the next few years is the rate of the US dollar. The land, on which the recently privatised hotels and restaurants in the resort were built, was sold in US dollars. These deals are expected to pour the most significant revenues in the company. For a long time it was believed that Sunny Beach AD would gain BGN60MN from the sale of the land. When its six-month financial report was published, however, it turned out that the amount negotiated with the private hotel-keepers totaled USD27,121,856. Currently, the money is equal to BGN54MN, according to the situation on the international currency markets.Unfortunately, a profit tax will be imposed on almost all sales revenues and this will be done this year, although payments are due within seven years. The reason is that the book value of the land has amounted to BGN300,000 so far, while the selling price exceeds USD27MN.Investments in the resort's infrastructure amounted to BGN22.9MN. Initial expectations that they would go beyond BGN30MN did not come true, but the planned expenses for 2002 and 2003 - a total of BGN20MN - were also exceeded. The increase of these expenses is the main risk for the shareholders of Sunny Beach AD, which runs two hotels in addition to the infrastructure. Because the funds may not be entirely compensated by the sale of electricity and water supply facilities, parks and alleys in the resort.Despite the BGN24.5MN profit, the cash funds of the company fell steeply. It was not a surprise, since the company makes deals (mainly concerning land sales) that will bring revenues in the years to come. Of the current BGN58MN in its bank accounts, some BGN22MN will soon be spent for the payment of BGN11.045 dividend per share. Since infrastructural investments did not stop on June 30, Sunny Beach AD may see its funds go down below BGN30MN in the autumn.

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