Central European Distribution Corporation has posted a dip in sales for the first quarter of this year, with net profit turning into a loss for the period.

The US-based company, which operates primarily in Central and Eastern Europe, said yesterday (5 May) that net sales for the three months to the end of March were US$217.9m, compared to $313.6m in the corresponding quarter a year earlier.

A 32% average devaluation of CEDC's primary functional currencies - the Polish Zloty, Russian Ruble and Hungarian Forint - compared to the US dollar from the same period in 2008, was primarily responsible for the sales slide.

On a comparable basis, CEDC saw net profits total $9.8m versus $12.1m a year ago. Net losses on a US GAAP basis, however, were $87.7m compared to a net profit of $18.3m. "The major difference between the US GAAP net income and comparable non-GAAP net income reflects unrealised foreign exchange movements relating to our foreign currency denominated debt," the company noted.

Operating profits reached $20.3m against $25.5m in Q1 2008.

"In light of uncertainties in the global market place and substantial currency movements in the first quarter, as well as high levels of inventory in the market from 31 December 2008 which resulted primarily from year-end excise tax increases in Poland and Russia, we were still able to achieve positive net sales revenues and earnings per share growth assuming constant exchange rates in our primary functional currencies from the same period in 2008," said company president and CEO, William Carey.

"We believe our core underlying business remains solid and we believe we will emerge out of this crisis as a stronger company with fewer competitors."

The company reconfirmed its full year 2009 net sales guidance of between $1.55bn and $1.68bn and its full year comparable fully-diluted earnings per share guidance of between $2.40 and $2.65.

Last month, CEDC said it will acquire a controlling stake in vodka producer Russian Alcohol this year, after agreeing to buy up some of the shares owned by private equity group Lion Capital for US$17.75m.