Unior will reduce the number of employees by 200

The recent announcement by Unior that it will cease tool production in Stari trg ob Kolpi by the end of the year and move it to Zreče, sending employees into retirement or laying them off, appears to be just the tip of the iceberg of problems faced by the Styrian metal products manufacturer. The supervisory board adopted financial and business restructuring measures at an extraordinary session on Monday, which, according to our unofficial information, also include reducing the number of employees by approximately 200.

"Due to the extremely poor results of current operations and the anticipated costs of urgently needed business restructuring, the management of Unior presented the supervisory board with the foundations for the company's business and financial restructuring, including a review of the economic viability of individual company activities," said the Zreče-based company, which employs 1,560 people, and nearly 2,800 in the entire group. The supervisory board was briefed on current operations and the management's report and fully supported the presented foundations.

One of the key problems of Unior, which has been led by Robert Vuga since June this year and previously for several years by Darko Hrastnik, is low profitability and debt. Among the key problems of Unior, which has been led by Robert Vuga since June this year, is profitability and debt. The company's half-year report reveals that Unior's sales revenues in the first six months of this year reached 105 million euros, which is 3.1 percent lower than in the same period last year. The operating result in this period amounted to 1.4 million euros, which is 2.9 million euros less than in the comparable period last year. The Zreče company thus ended the first half of the year with a loss of 1.2 million euros, significantly worse than last year when they achieved a net profit of 1.7 million euros. The company cites 3.3 million euros lower sales revenues, 2.5 million euros lower inventories of products and work in progress, 1.7 million euros higher labor costs, and 1.3 million euros higher financing costs at banks as the reasons.

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Sales revenues were lower precisely due to lower inflows in the hand tools and machine building programs, while revenues from the sale of forgings, which account for approximately 70 percent of the total, were even slightly higher than in the same period last year, also in physical volume. Although forging is primarily tied to the automotive industry, as it involves parts for the steering mechanisms of passenger vehicles, the company reportedly performs well in this program despite the cooling of this sector. This is allegedly also because it is not solely tied to electric vehicles. Unior confirmed on Friday that they will cease tool production in Stari trg ob Kolpi and move it to the main Zreče site, thereby closing 29 jobs.

High indebtedness

Unior, which is 45 percent state-owned, has been quite indebted for several years. The company's financial liabilities amounted to 96 million euros at the end of June, while the entire group's liabilities were 119 million euros. The ratio of the company's net financial liabilities to EBITDA was as high as 6.47 at the end of the year. In the half-year report, Unior stated that they are implementing measures to increase EBITDA and reduce indebtedness in line with the expectations of the banks. To this end, the company is selling its stakes in Unitur, Unior Components, and Štore Steel, where it holds a 29 percent stake. Binding offers for the steel company are reportedly expected by the end of October, and according to unofficial information, the Sij group is still interested in it. No explanations were received from Unior regarding these sales. However, the company could reduce its debt with these sales.

The problem with Unior is that it is involved in several and diverse activities, including the production of forgings for the automotive industry, the manufacture of hand tools, machine building, the production of tools for machines, and tourism. "The problem with the company is its focus. It is not good if the company's director spends five hours a day dealing with the automotive industry and five hours with tourism," illustrated a knowledgeable source in Unior who wished to remain unnamed. Unior also owns Unitur, which is involved in spa activities and manages the Rogla mountain ski resort.