From the General Manager
Dear Shareholders, Customers and Business Partners,
Every "open speech" is trying to explain "what marked the previous year?" and to give a direction on "what the future is going to look like?". However, sometimes it's hard to explain "what happened in the past?". And today, it is even more difficult to say, under the current circumstances, what the future is going to bring us.
When the stock exchange market drops and then show slowly signs of recovery, when the real estate sector (a field that had very low market entry barriers) become guilty of everything happens in the economy, when the politicians say that investments may boost the economy, but they boost the budget deficits by only paying salaries, when statistics show that land and apartments prices dropped by 20% - 30% or even 80% is hard to give an explanation, because the crisis or the crash need more strength of than explanations. The fact that even in this difficult time, we managed to keep the company on a high line, reporting positive business results, may be considered as a performance. Unfortunately, the economic effects of the economic crisis will extend in 2010 as well and we will be in the same dilemma: to sell or not to sell? Which are the assets that a company should keep?
A few years ago, the catchword was "not to sleep on cash - invest it!". Now, the most of the time we hear "in order to have the cash - you have to generate it".
The CEO of a company has to choose between having annual performance, and maybe to take a bonus and the possibility to record lower performance when the investments' value is declining: if he sells to generate cash can ruin the company's future, because he has to take into account the cyclical exploitation: "the cash is the king" will be replaced again by "investments are the real stars".
These are the terms we finished the year 2009 in and I expect 2010 to be alike, as it can be seen in the Annual Report and the activity plan for 2010. Certainly, when the USA and Germany economy will recover the Romanian economy and also the real estate sector will generate more cash. Otherwise, it will be a long recovery on its own strengths.
But until then, we will be very cautious and always creative!
