TALLINN - Estonia's largest confectionery, Kalev, posted a major loss for the first half of the year due to higher sugar prices, while its profitable real-estate arm announced it would build a number of new residential homes in Tallinn.
The group, which includes several business subsidiaries, finished June with a loss of 41 million kroons (2.6 million euros), which compares with the 17-million kroon profit posted in 2004.
Sales, however, were up over the six-month period by some 35 percent to 842.6 million kroons, Kalev reported to the Tallinn Stock Exchange. In particular, sales of Kalev Paide Tootmine and Vilma, a new subsidiary involved in bakery goods and flour, were major factors in the stellar group's sales growth.
Sales of sugar and chocolate confectionery products by Kalev grew 1.2-fold year on year to 46.8 million kroons. The group sold 5,600 tons of confectionery products during the financial year, which is 1.7 times more than in the previous 12-month period.
Still, the company cited a tripling of sugar prices after EU accession in May 2004 as the main reason for the financial losses.
Kalev's stock fell 14 percent on Sept. 1 after the news, though brokers said that support eventually came from smaller investors.
Meanwhile, Kalev Real Estate Company posted a profit of 24 million kroons during the period.
It announced last week that it was planning to build a number of new residential buildings in the Estonian capital. Board member Peeter Lillestik told the Baltic News Service that the company would build on two plots situated next to Lake Ulemiste in the southern part of Tallinn.
The company also intends to turn a former city-owned building in north Tallinn, an architectural monument, into an apartment complex.
In addition, Kalev REC has started building apartment houses in Tartu, and is currently building an eight-story office block in Tallinn.