Orsova Shipyard 1Q 10 results

Salaries expenses diminished 27% yoy to RON 6.5 mn while raw materials expenses decreased 34% to RON 6.1 mn. Thus, SNO swung to an operating loss of RON 0.6 mn, compared to a gain of RON 2.4 mn a year before. The company managed to post a net financial gain of RON 0.7 mn, up 55%yoy, as it booked a gain of RON 0.9 mn from reversal of impairment provisions for its securities portfolio. These securities are most likely SIFs shares bought near the top of the market in late 2007. All in all, the company barely stayed in black, reporting a net profit of RON 0.1 mn, down 95% yoy. Although we expected 2010 to be a tough year for SNO, these results suggest that the company might undershoot our expectations for FY 2010.