Information  X 
Enter a valid email address

Zalakeramia RT (ZALD)

  Print      Mail a friend

Tuesday 13 February, 2001

Zalakeramia RT

Final Results

Zalakeramia RT
12 February 2001



Phone 92/313-640 92/550-300
Telefax 92/312-070
E-mail zalaker@zalakeramia.hu
Investor relations Agnes Albrecht
Deputy CEO for Finance
  
                            ZALAKERAMIA RT.
                        Flash Report for 2000.

Below  is  the  consolidated and unaudited balance sheet  and  profit  and  loss
statement  for  the  year  2000  of Zalakeramia Group which was prepared in
accordance with the International Accounting Standards (IAS). The most important
features  and  main  events of our financial management is briefly summarised
below.

Main events significantly effecting the operations of the Group:

-   Hussar Holding AG, the subsidiary of Zalakeramia Rt. has sold its 36.2%     
    share in KERAMIKA Horni Briza on 26 January, 2001. It has already decreased 
    investment in the Czech company by 1 billion HUF in 2000.

-   The Company has paid back another 106 thousand EUR according to the
    schedule included in the modified syndicate loan agreement at the end of
    December, thus the credit facility has decreased to 42.146 thousand EUR by  
    the end of the year.

Main data for the year of 2000 of Zalakeramia Rt. parent company (based on  the
unconsolidated financial statements of the parent company prepared in accordance
with the International Accounting Standards):

-   Sales revenue exceeded HUF 7.1 billion being a 4.7% increase as compared to 
     the corresponding period of the previous year.

-   Our Company sold more than 5.7 million sq. mts of tiles considered to be    
    the main product.

-   Gross margin exceeded 2.6 billion HUF being a 22.9% increase and an         
    additional HUF 495 million gross margin compared to last year.

-   Gross margin percentage amounted to 37.2%, compared to the 31.7% of last    
    year.

-   Exchange rate loss on the syndicated credit amounted to about HUF 1.4       
    billion and the amount of interest, expense amounted to HUF 0.9 billion.

Main data for the year of 2000 of our S.C. CESAROM S.A. subsidiary (based on
the unconsolidated financial statements of the subsidiary prepared in accordance
with the International Accounting Standards):

-   Sales revenue increased by 48.1 % compared to the base period.

-   Gross margin percentage amounted to 42.4% in the period under review
    exceeding the figure of the basis period by 4.9 % points.

-   We  have  produced  more than 4.5 million sq. mts of tiles and despite the
    fact that the last quarter is not a seasonal period within the building
    industry, finished-goods inventory showed only a slight increase in the
    last quarter and there was a finished goods inventory of 2.8 weeks only at
    our Romanian subsidiary.

-   S.C. Cesarom S.A. has sold over 4.6 million sq. mts. of self-produced
    tiles which is why its finished-goods inventory decreased compared to
    1999.

-   The production of the sanitary plant shows an increase of 32.8% and
    almost reached 540 thousand pieces.

-   We have accounted for 677 million HUF as deferred tax and 70 million HUF
    as Net monetary position. Taking these into consideration, the net profit
    of our Romanian subsidiary amounts to 531 million HUF

Main  data for the year of 2000 of our Inker d.d. subsidiary (based on the
unconsolidated financial statements of the subsidiary prepared in accordance
with the International Accounting Standards):

-   Produced quantity in sanitary ware grew by 55.2 %, while growth of
    porcelain production was 5.4 % as compared to the basis period.

-   With regard to the volume of sales, we  sold 300 thousand pieces of
    sanitary ware and this exceeds by 48.4% the amount of the basis period.
    9,201 thousand pieces of porcelain products were sold which exceeded the
    quantity sold in the basis period by 1.2%.

-   Sales revenue increase of our subsidiary in Croatia was 12.5 % compared to
    the basis period.

-   Gross margin went up by 35.3% as compared to 1999 and gross margin
    percentage was 14.0%.

-   Ratio of selling, general and administrative expenses to sales revenue was
    13.7 % on a yearly basis which is lower than the figure of the  basis
    period by 1.2% points.


I.  Analysis of the consolidated and unaudited profit and loss statement

Sales revenue

Sales revenue of the Group is shown below:


                                                               in HUF thousands

Description                  Year 2000                      Year 1999
                  Domestic   Export     Total      Domestic     Export     Total
Zalakeramia Rt.  5 600 735    904 251  6 504 986  5 758 072   627 687  6 385 759
Inker d.d.       1 785 423  1 729 278  3 514 701  1 450 699 1 654 464  3 105 163
S.C.Cesarom S.A. 7 067 322    588 145  7 655 467  6 322 602   371 198  6 693 800
                           
Total           14 453 480  3 221 674 17 675 154 13 531 373 2 653 349 16 184 722


Sales revenue of the Group has increased by 9.2% in the previous year.  Our
subsidiary in Bucharest realized a significant increase reaching  14.4%.  The
sales  revenue  increase of the parent company is smaller (1.9%),  however  it
should be emphasized due to the realistic comparability of the figures, that HUF
870  million  was  realized from the sales of products from  the  closed  Pietra
plant.  Sales revenue from exports has increased on group level by  21.4%  and
18.2% of the revenue has been realized from export sales against the 16.4% of
1999.

Tiles

A total of 10,345.036 sq.mts. of tiles were sold by the Zalakeramia Group in
2000.  This is slightly lower than the quantity sold in 1999, however 1 million
sq.mts.  were  sold from the products of the closed Pietra plant in the  basis
period  which  has been substituted in full with production increase, that is
decrease of inventory.

The  wall  tile  inventory of S.C. Cesarom S.A. corresponded  to  1.7 weeks of
production,  while its floor tile inventory amounted to 3.6 weeks of production
at  the  end of the year. Due to the extremely high demand of tiles, there was
lack of capacity at our Romanian subsidiary in the previous year. As a result of
repeated price increases and cost reductions we have realized a 49.3% gross
margin percentage for tiles.

Tile inventory has decreased by 274 thousand sq.mts. at the  Hungarian  parent
company  last  year  and there was a total of 1.1 million  sq.mts. of finished
products at the end of the year.  Despite the fact that the last quarter is not
a seasonal period, inventory has only slightly exceeded 100 thousand sq.mts.
with use of full production capacity in this period. 

Viewing our tile export, it can be determined that we have overfulfilled  our
goals.  There was no change in the breakdown of exports - tiles  were  exported
from  the  parent company only and revenue from these sales exceeded the basis
period by 30.8%. 19.0% of tile revenue was realized from export. These results
were achieved in surroundings where our receptive markets are still oversupplied
and competitors are on the world market with a strong price competition and a
huge supply.

Sanitary ware

                      Production (pcs)         Sales (pcs)
Inker d.d.                 323,092               299,619
S.C. Cesarom S.A.          537,888               499,210


In our sanitary ware plants in Croatia and Romania the volume considerably
increased both in production and in sales in 2000.

Inker d.d. produced 323,092 pieces of sanitary ware exceeding by 55.2% the
volume of 208,210 pcs in the basis period. Quantity of sales increased by 48.4%
which were sales of 299,619 pcs of sanitary ware. 43.8% of revenue was realized
from export.

The  quantity of sanitary ware produced at our Romanian subsidiary in the period
under review exceeded the production of the basis period by 32.8%.

We  have  sold  a total of 499,210 pieces of sanitary ware in 2000  against  the
405,368  pieces sold in the basis period which corresponds to a 23.1%  growth.
54.4%  of  revenue from sanitary ware of our Romanian subsidiary was  realized
from  export.  The  most significant target countries last  year  were  Austria,
Hungary  and  France.  Gaining ground for French export is  especially  pleasing
which represents 20.4% of export revenue against the 3.4% in 1999.

Porcelain tableware

Total quantity of porcelain tableware produced in 2000 exceeded 9.6 million
pieces exceeding by 5.4% the amount of the corresponding period of the previous
year. 9.2 million pcs were sold which exceeds the figure of 9.1 million sold in
1999 by only 1.2%. Revenue exceeded the basis figure by 4.0%. Within this
domestic sales revenue increased by 21.4% which was a result of strong demand
for hotel porcelain concurrently with the recovery of tourism last year. At the
same time there was a decline in exports - representing 66.2% of revenue - as
there is a constantly growing competition on the Western-European market. As a
result, export revenue has decreased by 2.7% compared to the basis.


Stove tiles

We have sold 732,183 stove tile units and revenue has exceeded basis revenue by
3.6%.

Terrazzo

We have not been able to stop the decline of terrazzo tiles in the last
quarter. A total of only 47,590 sq.mts. of terrazzo were sold in 2000. At the
proposal of the management, the Board of Directors is dealing with inspection
of cost-effectiveness of production.

Gross margin
                                     in HUF thousands

Description       Year 2000                 Year 1999             Index %
Zalakeramia Rt.      2 319 798              2 015 313               115,1
Inker d.d.             479 822                396 956               120,9
S.C. Cesarom S.A.    3 256 998              2 570 444               126,7
Total                6 056 618              4 982 713               121,6

Gross margin percentage by companies is as follows:

  Description                Year 2000                         Year 1999
Zalakeramia Rt.                35.7%                              31.6%
Inker d.d.                     13.7%                              12.8%
S.C. Cesarom S.A               42.5%                              38.4%
Total:                         34.3%                              30.8%

Gross  margin of the Zalakeramia Group has increased by 21.6% last year with  a
value  exceeding 6 billion HUF. In respects, to volume, the gross margin of  our
Romanian subsidiary is outstanding the whole year through, increasing its  gross
margin  by 687 million HUF compared to the basis. The performance of the  parent
company  has  slightly declined compared to the first three  quarters  of  2000,
however over 300 million HUF gross margin surplus was realized compared  to  the
basis  and  gross margin percentage increased by 4.1% points. In the  case  of
Inker d.d., gross margin increased by 83 million HUF compared with the basis 
period,  however there was some decline in growth compared to the figures of 
the first three quarters.

The  gross  margin of the Group exceeds the basis period figure by 1.1  billion
HUF and the percentage shows a 3.5% point increase.

Sales, general and administrative expenses

                                          in HUF thousands

Description       Year 2000            Year 1999       Index %
Zalakeramia Rt.      1 586 797         1 322 696         120,0
Inker d.d.             455 598           432 273         105,4
S.C. Cesarom S.A.      881 508         1 047 452          84,2
Total:               2 923 903         2 802 421         104,3
Jaszberenyi uti Kft.    83 056
Lakopark Kft.            4 223
Zalakeramia Ausztralia                       580
Hussar Holding AG       83 541           262 371          31,8
Eurokeramika Ltd.                        117 885
Grand total:         3 094 723         3 183 257          97,2

Cost  reduction is still significant (close to 166 million HUF) at our  Romanian
subsidiary within our productive companies.

The  sales, general and administrative expenses exceed the expenses of the basis
period  by  264 million HUF which represents a 20.0% increase. The  expenses  of
hedging  forward trading made in the first half of the year as well as those  on
holding level regarding group operation accounted for at the parent company  all
pay a role in this increase.

This  row  includes  the  expenses  for  recultivation  stipulated  earlier   at
Jaszberenyi uti Kft. The Company has acquired Lakopark Kft. which has  a  share
capital of 3 million HUF in which it has apported the properties of Pietra  area
with  the  exception of the mines. Minimal general expenses, incur in connection
with the Kft.

Result of other operating income and other operating expenses

Net  proceeds from the disposal of fixed assets had a significant role in other
operating income the amount of which was HUF 113,332 thousand. There was a total
income of 43,619 thHUF from debts written down, compensation, late interest.

Other  income in a total of 77 million HUF arose from leasing as well as further
income  not  connected to basic activity in 2000. A net other income  of  15,760
thHUF  was  formed  following formation/release of provisions  for  environment
protection.

There was a significant decline in other operating expenses and their amount  is
only  35.5% of the amount in the basis period. This line includes local  rates.
The amount of them at Group level is HUF 141,548 thousand. HUF 174,608 thousand
has been accounted in connection with depreciation of fixed assets, transfer  of
assets  free of charge and scrapping, respectively. The amount of credit  losses
and  damages amounted to HUF 61,246 thousand. Non-recurrent extraordinary  items
have  been  accounted  in connection with Pietra plant,  mining  areas  and  the
write-off of the brick factory in Bucharest in the basis period and no such 
expenses  arose  in this line in the period under review  therefore  Other
Operating expenses became much lower.

Exchange rate loss/exchange rate gains

Exchange rate loss/exchange rate gains are shown in a separate line in a  netted
manner  the  balance of which is a loss and which increased by 116.5%  compared
to the basis period.

Exchange rate gains:                     HUF 1,127,581 thousand
Exchange rate loss:                      HUF (2,770,115) thousand
Balance:                                 HUF (1,642,534) thousand

The  largest  portion  of  the exchange rate losses  -  that  is  HUF 1,428,820
thousand - was made up by the exchange rate loss on the syndicated credit.  This
amount  is lower by HUF 278,480 thousand than the figure of the basis period. 
HUF 371,112 thousand was capitalised in the basis period. At the same time with 
the decrease  of  the  credit  facility  the  exchange  rate  loss  to  be 
included considerably lessened already in the second half of the year.

Forward  hedging transactions have been concluded by the third quarter on  which
HUF 112,786 thousand exchange rate gains arose.

In  course of the year end translation of Hussar Holding AG's funds an  exchange
rate  loss  of HUF 76 million arose. The exchange rate gains of HUF 304  million
on  the short term investment made in 1999, generated at the end of the previous
year  was included in the basis period thus no further gains arose on its  sales
in the period under review.

Results of financial activities

Interest income

Interest  income  increased by HUF 99 million (32.0 %)  compared  to  the  basis
period.

Main reasons of this growth:

-   growth of interest income from cash provided by operations, 
-   as interest income on the amounts received from capital increases.

Interest expenses

The  amount  of interest expenses amounted to HUF 943 million at the Group.  The
largest  item  of  interest expenses is the interest expense on  the  syndicated
credit totalling HUF 865 million in 2000. The amount of interest expense on  the
syndicated  credit  in  the  basis  period amounted  to  only  HUF  589  million
including also the interest capitalization.

Interest rate of the syndicated credit facility went up in the last quarter  and
its rate was 6.18%.

Growth compared to basis is 40.2%, main reasons of which are as follows:

-   Considerable weakening of Forint against US Dollar.
-   More than 1.5% point growth of the LIBOR level attached to USD.
    Interest expenses were influenced by these two factors until the amendment
    of the credit agreement - end of July 2000.
-   A syndicated credit interest of HUF 166 million was capitalised in the basis
    period.

Permanent diminution in associated company

In the basis period KERAMIKA Horni Briza investment was written off by HUF 758
million. Considering that this investment was sold in January 2001, an
additional HUF 1 billion loss of value was included in the period under review
to show our investment at net selling price in our books. If it had not been
sold this investment would be fully written off during 2001.


Net monetary position

In the period under review the amount of monetary assets exceeded that of the
monetary liabilities therefore the Company had loss on net monetary position.

Corporate tax Liability

In 2000 this line includes the corporate tax liability on the profit originated 
at our S.C. Cesarom S.A. subsidiary and payable in accordance with the Romanian
tax laws.  Its rate was significantly reduced from the previous 38% from 
1 January 2000.  It was changed to 25% on the profit from domestic sales and to 
5% on the profit from export sales.  Our subsidiary received HUF 100,167
thousand tax refund related to the previous years.  This allowance is granted in
Romania to the companies which have satisfied their tax payment liabilities
required by the law and have no tax arrears.  Contrary to the previous periods 
when tax refund was shown in Other income, this amount reduced the tax liability

for 2000.  As a result of all these, the company paid total 20.2% corporate tax.


Deferred tax

Deferred tax item shown in the profit and loss statement includes the part of
total deferred tax liability arising as a result of the inflation adjustments to

the financial items at S.C. Cesarom SA, falling on the year under review and, on

the other hand, deferred tax accounted for at Zalakeramia Rt. Net amount of
these items was a loss of HUF 512 million in year 2000.

Share of profit/loss of associated company

Our Keramika Horni Briza investment was transferred into financial investments
in the balance sheet from 1 April 1999 considering that Hussar Holding AG had
lost its determinant role in the control of the company.  Consequently, no
profit was recorded from the interest in associated company for year 2000.


Net profit/loss

Considering all these items, consolidated and unaudited profit/loss of the Group
is a loss of HUF 1,486,469 thousand.


II.  Analysis of the consolidated and unaudited balance sheet

Balance sheet total of the Group increased by 1.3% in the period under review.


Assets

Current assets
The rate of growth of the current assets is 9.6%.

Cash and cash equivalents went up by 25.6% and it was caused by the effect of
the previously introduced money savings and the fact that the Company wishes to
increase its capacity from own sources in 2001.

One reason for the increase of trade receivables is that the method of payment
by transfer has been introduced at S.C. Cesarom S.A. subsidiary instead of
payment in cash used last year.  Instead of 'distributional' trade a 'real'
market economy starts to gain ground here, as well.  As a consequence, trade
receivables grew by HUF 223 million.  In addition, the payment period extended -
due to the headaway of imports domestic market became very strained - as a 
consequence of which trade receivables were HUF 331 million higher than the
figure of the basis period.

The amount of inventory rose by 9.3%


Short term investments
The parent company sold its short term investment therefore no data were
included in this line in the period under review.  In the basis period
stockholdings due after three months were shown here.

Other current assets increased by 473.8% as compared to the basis period.
The largest item of this period is the receivables from the selling of
securities amounting to HUF 1,218 million at Zalakeramia Rt. and HUF 380 million
at Jaszberenyi uti Kft.  This latter amount was received in January 2001. 
Furthermore, a short term loan granted in an amount of HUF 141 million is also
included here and the prepayments of costs relating to the amendment of the 
syndicated credit in the amount of HUF 119 million.


Fixed assets and others

The amount of fixed assets net remained at basis level.

Decline of intangible assets net was caused by the fact that the actual
replacement of assets did not reach the amount of amortisation.

Deferred tax line includes deferred tax due to the loss generated at the parent
company which can be eliminated in the later profitable periods.
36.9% decrease in investments results mainly from a further write-off of 
KERAMIKA Horni Briza investment detailed above.


Liabilities and shareholders' equity

Current liabilities went up by 30.4%

Accounts payable and accrued expenses increased slightly.

Short term debts grew by 88.1%.  Main reasons of this growth: the increase of
the amount of factoring was HUF 287 million at the parent company and,
respectively, the amount of the credit facility raised by our subsidiary in
Croatia due to temporary liquidity problems, slightly increased.

Current portion of long term liabilities

This line includes current portion of the repayment of the syndicated credit
facility amounting to EUR 2,235 thousand equalling to HUF 594 million.

Long term liabilities

Long term liability

Rate of decrease in long term liabilities is 15.9%
The portion due over a year of the syndicated credit facility existing on 31
December 2000 is included here the amount of which is EUR 39,911 thousand or 
HUF 10,605 million.

The decline was caused by the repayments made last year the amount of which was
USD 10,200 thousand at the time of the amendment of the credit agreement and 
EUR 106 thousand each at the end of September and December, respectively.

Deferred tax
S.C. Cesarom S.A. indexes the value of its fixed assets in the financial
statements prepared in accordance with IAS in compliance with the requirements
for inflationary economies.  Deferred tax liability shown in the balance sheet
covers the tax to be calculated in accordance with IAS on the difference between
the restated value and Romanian book value being the base of taxation.

The amount of environmental provisions declined because the recultivation works
have been started at Jaszberenyi uti Kft. and some expenses already occurred in
connection with them.


Minority interests increased by 6.6% as compared to the basis period.
This increase results, from one hand, from the adjustment effect on the change
in exchange rates and on the other, at our subsidiaries where there are minority
interests, the profit grew compared to the basis period.


Equity increased by 8.7%

In the first quarter 2000 Zalakeramia Rt. increased its issued capital by
761,052 shares of a face value of HUF 1,000 each corresponding to a 19.9%
increase.

The capital increase was made over face value and the portion over the face
value increased the capital reserves resulting in a growth of 12.8%.

Retained earnings declined by 64.0%.  Main reason of this was that the 
HUF 2,290,040 thousand retained earnings registered at the end of the basis
period had to be decreased by the amount of the HUF 1,486,469 thousand loss for
2000.  At the same time, the sales of the treasury shares in the portfolio
slightly increased the retained earnings in the period under review.

Translation adjustment is the balance of exchange rate differences generating on
translating into Forint during the consolidation.  The considerable difference
here is caused by the changes in the cross-rates of foreign currencies.


III.  Cash Flow

Closing funds for 2000 of the Company exceeded HUF 4 billion.  This amount
exceeded by over HUF 800 million the funds at the end of the basis period.
Last year the Company reduced its syndicated credit facility first by USD 10,200
thousand at the time of restating the credit agreement and then by repaying 
EUR 106 thousand each at the end of September and December.
Funds paid for invested fixed assets were reduced as compared to the basis as
the capital projects at the subsidiaries had been completed.  The amount shown
here exceeded even this way the amount of depreciation.  The change of financial
investments does not involve an actual growth of funds as depreciation is
included in net profit.


IV. Financial ratios

                                                     31.12.2000.    31.12.1999.

Pecuniary standing
1. Ratio of liabilities within total liabilities 
   and shareholders' equity:                            49.4%           52.8%
2. Efficiency of stocks:                               423.2%          423.5%
3. Stock turn ratio:                                     4.58           4.37
4. Chronological average of stocks                  3,858,846      3,704,948


Financial conditions
1. Rate of indebtedness:                                49.4%           52.8%
2. Liquidity ratio I:                                   3.88            4.62
3. Liquidity ratio (quick ratio):                       2.57            3.05
Profitability
Profitability to sales:                                 -8.4%           -9.6%
Ratio of sales within total income:                     96.4%           96.9%




                                 ZALAKERAMIA Rt
                    Consolidated Balance Sheets (unaudited)


All amounts in HUF 000's


                                              2000.12.31.   1999.12.31.   index
ASSETS

CURRENT ASSETS
Cash and cash equivalents                      4 016 052     3 197 738    125,6%
Trade accounts receivable                      1 983 498     1 281 958    154,7%
Inventory                                      4 176 732     3 821 376    109,3%
Short-term investments                                 0     2 576 324       -
Other current assets                           2 152 489       375 113    573,8%
Total current assets                          12 328 771    11 252 509    109,6%


FIXED ASSETS AND OTHERS
Tangible assets, net                          17 224 116    16 943 775    101,7%
Intangible assets, net                            84 469       155 883     54,2%
Deferred Tax                                     534 485       369 869    144,5%
Investments                                    1 793 064     2 842 192     63,1%
Total fixed assets and other                  19 636 134    19 941 850     98,5%
TOTAL ASSETS                                  31 964 905    31 194 359    102,5%


LIABILITIES AND OWNERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses          1 831 687     2 008 378     91,2%
Short term loans payable                         750 527       398 992    188,1%
Current portion of long term debts               593 860        28 975   2049,6%
Total current liabilities                      3 176 074     2 436 345    130,4%

LONG TERM LIABILITIES
Loans                                         10 720 135    12 752 656     84,1%
Deferred Tax                                   1 680 127     1 249 016    134,5%
Environmental provisions                         225 390       241 150     93,5%
Total long term liabilities                   12 625 652    14 242 822     88,6%


Minority Interest                                696 188       653 211    106,6%

OWNERS' EQUITY
Issued capital                                 4 593 411     3 832 359    119,9%
Treasury stock                                         0       (12 297)       -
Share Premium Reserve                          8 392 681     7 441 366    112,8%
Retained earnings                                824 430     2 290 040     36,0%
Translation adjustment                         1 656 469       680 382    243,5%
Total owners' equity                          15 466 991    14 231 850    l08,7%

TOTAL LIABILITIES AND OWNERS' EQUITY          31 964 905    31 564 228    l01,3%


   
                               ZALAKERAMIA Rt.
           Consolidated Statement of Profit and Loss (unaudited)

All amounts in HUF 000's

                                              2000.12.31.   1999.12.31.   index

Turnover                                      17 675 154    16 184 722    109,2%
Cost of sales                                (11 618 536)  (11 202 009)   103,7%
GROSS MARGIN                                   6 056 618     4 982 713    121,6%

Selling, general and administrative expenses  (3 094 723)   (3 183 257)    97,2%
Other operating income                           250 787       207 276    121,0%
Other operating expenses                        (556 360)   (1 569 383)    35,5%
OPERATING PROFIT                               2 656 322       437 349    607,4%

Exchange diff. expense/income                 (1 642 534)     (758 775)   216,5%
Interest income                                  408 676       309 570    132,0%
Interest expense                                (943 377)     (672 746)   140,2%
Permanent diminution in associate             (1 026 140)     (757 560)   135,5%
NMP                                              (69 530)       97 276        -
NET PROFIT BEFORE TAX                           (616 584)   (1 344 886)    45,8%

Taxation                                        (346 602)     (274 088)   126,5%
Deferred Tax                                    (512 085)      145 125

NET PROFIT AFTER TAX                          (1 475 270)   (1 473 849)       -

Result of interests in associated companies            0       (75 677)       -
Minority Interest                                (11 199)          235        -
                                                                     0

NET PROFIT AFTER TAX & MINORITY INTEREST      (1 486 469)   (1 549 291)       -

                                                                      thHUF

                               Cash Flow Statement

Description                              2000.december 31.     1999.december 31.
Opening cash and cash equivalents               3 197 738             4 444 818
Net (loss)/profit                              (1 486 469)           (1 549 290)
Depreciation                                    1 275 582             1 158 782
Exchange rate loss                              1 428 820             1 707 300
Decrease/increase in inventory                   (355 356)               52 180
Decrease/increase in trade receivables             97 408            (2 134 767)
Decrease/increase in liabilities                 (176 691)             (321 289)
Decrease/increase in minority interest             42 977               (19 931)
Environmental provisions                          (15 760)              241 150
Decrease/increase in deferred tax                 266 497              (587 241)
Cash flow provided by operations                1 077 008            (1 453 106)
Addition to/disposal of investments            (1 484 509)           (2 952 857)
Decrease/increase in financial investments      1 049 128               829 699
Cash flow used in investing activities           (435 381)           (2 123 158)
Increase/decrease of capital                    2 721 609             1 348 701
Increase/decrease in loan                      (2 544 921)              980 483
Cash flow generated by financial activities       176 688             2 329 184
Free cash flow (HUF th)*                          818 315            (1 247 080)
Free cash flow (USD th)*                            2 874                (4 380)
Closing cash and cash equivalents (HUF th)*     4 016 053             3 197 738
Closing cash and cash equivalents (USD th)*        14 105                11 231

*calculated with a rate of HUF 284.73=USD


Number of employees

                               End of basis     Beginning of     End of period
                               period           current year     under review

Zalakeramia Group                  3.066           3.058             2.966



Data relating to share structure and shareholders

Owners' structure, rate of shareholding (31 December)


   

                                             Total share capital             
Description of shareholders            Beginning period        End period   
                                          %       pcs          %        pcs    

Hungarian institutional                54.34    2495987      54.64    2509828  
Foreign institutional                  29.15    1338402      29.14    1338402
Hungarian individuals                  15.63     718232      15.64     718232
Foreign individuals                     0.09       4337       0.09       4337
Employees, senior officers              0.28      12780       0.28      12780 
Treasury shares                         0.30      13841          0          0 
Shareholders belonging to state
finances                                0.21       9832       0.21       9832

Total                                 100.00    4593411     100.00    4593411


                                                   Listed series
                                       Beginning period        End period
                                          %       pcs          %        pcs     
Hungarian institutional                54.36    2495987      54.64    2509828
Foreign institutional                  29.15    1338402      29.14    1338402
Hungarian individuals                  15.65     718232      15.64     718232
Foreign individuals                     0.09       4337       0.09       4337
Employees, senior officers              0.28      12780       0.28      12780
Treasury shares                         0.26      12162          0          0
Shareholders belonging to state 
finances                                0.21       9832       0.21       9832

Total                                 100.00    4591732     100.00    4593411


                                                                       
Number of treasury shares (pcs) in the year under review

 1 January        31 March         30 June        30 September      31 December

133 employee   1628 employee    1679 employee       1679 pcs              0

12162 at       12162 at         12162 at          12.162 at               0
subsidiary     subsidiary       subsidiary        subsidiary


Shareholders having more than 5% shareholding

     Name           Quantity (pcs)          Shareholding
                                                (%)

Arago Rt.               761,052                16.56

Bank      Austria       580,572                12.63
Creditanstalt                                  

Altalanos   Ertek-      296,778                 6.50
forgalmi Bank  


Senior officers, strategic employees

Type       Name           Title          Beginning of   End of en-   Own shares
                                         engagement     gagement     held (pcs)
                                    
 BM   Imre Takats      Chairman & CEO     1999.04.28    2004.04.30         50
 BM   Agnes Sasinszki    Director         1999.04.28    2004.04.30      6,500
 BM   Gyorgy Doleschall  Director         1999.04.28    2004.04.30          -
 BM   dr. Laszlo Zala    Director         1999.04.28    2004.04.30          -
 BM   Sandor Jellen      Director         1999.04.28    2004.04.30         13
 BM   Viktor Polgar      Director         1998.04.23    2003.04.23          -
 SP   Tibor Soos       Gen. Deputy CEO    1999.06.01    2004.05.31      4,000
 SP   Agnes Albrecht   Deputy CEO for     1999.06.01    2004.05.31      2,460
                       Finance
 SP   Istvan Toth      Deputy CEO for     1999.09.01    2004.05.31          -
                       Trade & Marketing
 SB   Janos Granicz    Chairman           2000.06.01    2003.05.31          -
 SB   Ilona Borsos     Member             2000.06.01    2003.05.31          2
 SB   Dr. Ervin Toth   Member             2000.06.01    2003.05.31          -
 SB   Donald Sharpe    Member             2000.06.01    2003.05.31          -
 SB   Sandor Egyed     Member             2000.06.01    2003.05.31          -


Type: Employee in strategic position (SP), Managing Board Member (BM),
Supervisory Board Member (SB).

Extraordinary notices published in the period under review

   Date        Published             Subject, brief content

2000.01.14     2000.01.17   Change in the personnel at Cesarom
2000.02.14.    2000.02.15.  Capital increase
2000.02.15.    2000.02.16.  Registration of share capital at Registrar of       
                            Companies
2000.03.28.    2O00.03.29.  Annual General meeting notice
2000.04.05.    2000.04.06.  Appointment of Supervisory Board member at Cesarom
2000.04.l4.    2O00.04.18.  Approval of financial statements for 1999 of 
                            Inker d.d.
2000.04.25.    2000.04.27.  Notification on the completion of the Annual Report 
                            and its place to review
2000.04.27.    2000.05.02.  Notification on the purchase of shareholding        
                            exceeding 5%.
2000.04.29.    2000.05.03.  Report on the Annual General Meeting
2000.05.04.    2000.05.05.  Change in the officers of Cesarom
2000.05.04.    2000.05.05.  Resignation of Agnes Elek from Board membership
2000.05.12.    2000.05.15.  Quick report for the first quarter
2O00.07.25.    2000.07.26.  Amendment of the USD 50 million syndicated credit
2000.08.11     2000.08.14.  Quick report for the first half year
2000.11.10.    2000.11.13.  Quick report for the first nine months
2000.11.14.    2000.11.15.  Sales of treasury shares


Zalaegerszeg, 9 February 2001

BOARD OF DIRECTORS OF ZALAKERAMIA RT.