Investors will be able to subscribe for these between March 21-26 at a share price set between z3.3.50-5, which means that the value of the offer will range from z3.38.5-55 million. The company expects to obtain around z3.48 million from the IPO.
The funds will enable us to strengthen our position on the domestic market and significantly increase our export to EU countries, says Tadeusz Kurek, president of NTT System. Some z3.20 million of the acquired money will be spent on the construction of a new plant, to be completed by the end of the year, and another z3.11 million for a logistics center to open the following year.
Expanding production
NTT System will start to assemble computer parts for Western producers in addition to the primary output at its plant in Zakrjt, on the outskirts of Warsaw. The margin on such services is lower than on assembling complete computers, but we dont want production lines to fall idle, says Kurek. Last year, NTT System sold 168,000 computers and its president does not expect production to increase more than two-fold this year because the market cant absorb more.
Tadeusz Kurek says that the construction of a new plant will facilitate expansion and increase production output to over a million computers annually, but plans for this year remain modest. The plan for this year is 200,000 desktops, although we would like to sell 220,000, says Kurek.
Meeting the market
According to the International Data Corporation, over 2.3 million computers were sold in Poland last year, the value of which amounted to around $2.2 (z3.6.5) billion. In contrast, in 2001 the value of computer sales was just under $1 (z3.2.917) million.
In 2006, the number of computers used in Poland was up to 6.8 million. In 2010, the number will grow to 10.7 million. [Use of] desktop units and servers will grow by 28 and 35 percent, respectively, posits Aleksander El Mahdi, an associate analyst at IDC Polska. According to El Mahdi, the most dynamic change will be observed in the growth of laptop sales, which will increase by some 16.3 percent a year.
Laptops currently account for only 3.2 percent of NTT Systems production. Within the next three years we want laptops to constitute 50 percent of production, says the firms president. The company will also focus on the profitability of servers and other tech products.
The year ahead
According to El Mahdi, Polish-made computers are usually chosen in public-sector tenders because of lower prices. Tadeusz Kurek sees hope that this year will be good for public tenders. In 2007, a number of tenders need to be completed. Otherwise, money will be lost, he says.
Remigiusz Sopel, an analyst from IDM SA confirms the probability of NTT Systems benefiting from public-sector orders. Apart from that, the company may see its highest number of orders from SMEs. Thanks to the influx of EU structural funds, [this sector] will rise even more, says Sopel.
Wac3aw Iszkowski, president of the Polish Chamber of Information Technology and Telecommunications (PIIT), says that private citizens, especially those living in rural areas, are also likely to buy more computers.
The saturation of the internet on the Polish market has reached some 30 percent and will continue to grow. Within the next four years Poland will see further economic growth and Poles will have more money. In addition, internet will be cheaper and more accessible. People will be motivated to replace old computers or, if they have none, to buy one, adds Iszkowski.
Going west
Currently, some 94 percent of NTT Systems production is restricted to the local market. The company sells some 44 percent of the remainder to Benelux countries and 26 percent to Great Britain, and wants to increase exports significantly.
IDMs Sopel says export growth is a golden opportunity for the company. They already have experience and if they can match that with value-added services, they will be successful, says Sopel. By the end of 2007, NTT plans to extend its electronic-distribution channel for individual clients. We assume that we will use it to sell some 20-30 percent of our products, says Jerzy Rey, chairman of NTTs supervisory board. NTT System intends to increase its net profit by nearly double this year over last years figure of z3.8.09 million, with revenues of z3.527 million. The prognosis for 2007 puts the companys projected net profit at z3.14.6 million, with revenues of z3.670 million.
Andrzej Wrsbel
NTT Systems debut on the WSE at the beginning of April is expected to enable the company, a producer of computer hardware, to implement its strategy to ambitiously expand its current output of 200,000 units.
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