Delay in Production Launch Impacting Revenue Growth
The commencement of production at Smart Organic AD’s new facility in the industrial zone near Bozhurishte, just outside Sofia, has been postponed until autumn. This delay, as announced by the company through x3news.com, is primarily due to infrastructural setbacks related to the electrical supply necessary for the operation.
New Production Timeline
Production is now anticipated to begin in October 2024. Consequently, the company expects a slowdown in revenue growth compared to their initial projections.
Revised Revenue Growth Forecast
The updated forecast suggests a revenue growth range of 10-15%. For the January to July period, preliminary data indicates a 16% year-on-year increase in revenues, according to the announcement.
Infrastructure Challenges
The delay in launching the new production line stems from issues in securing electrical infrastructure. Smart Organic has pointed out that the construction of the necessary facilities in the Bozhurishte Industrial Zone is lagging, which is the responsibility of the National Company for Industrial Zones and the electricity distribution company ERM West.
Recent Business Developments
In July, Smart Organic successfully initiated deliveries to Rossmann, a pharmacy chain with over 2,200 stores across Germany. However, the company also reported the closure of its organic store located on G. S. Rakovski Street in Sofia due to financial losses. On a positive note, they recorded an increase in online revenue, reaching 200,000 euros last month from their online store, naughtynuts.de. Additionally, revenues from Romania surged over 180% for the first half of the year, driven by the introduction of new products in Kaufland Romania.
Expansion into European Markets
Smart Organic has launched a new European online store, bettr-food.com, which operates from their warehouse in Germany. From the end of July, the company also introduced a new product line of ready-to-eat protein soups and plans to expand its offerings for the dmBio brand in Germany.
Stock Market Performance
Over the past year, Smart Organic’s shares have appreciated by nearly 39%, with the company’s market capitalization reaching just under 238.2 million leva.
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