Drinks Americas has slashed costs in its third quarter, but has reported a drop in sales and heavier losses for the first nine months of its fiscal year.

Net sales for the nine months to the end of January were US$846,000 compared to $2.2m in the same period of the previous year, according to a stock filing by Drinks Americas yesterday (22 March).

Sales in the third quarter fell to $397,000 from $565,000 a year earlier.

There was more bad news for the Olifant vodka producer's bottom line, with net losses for the nine months of $4.4m, against $3.5m in the prior year. Higher interest charges dragged the firm further into the red.

Drinks Americas continued to make progress on cost cutting across its business, however.

Operating losses for the nine months came in $240,000 lower than last year, at $3.6m, while third quarter operating losses were lower by $1m, at $521,000.

In a company results release, which omitted full quarterly figures, Drinks Americas said that it had cut selling, general and administration expenses by 62% in the third quarter.

"We believe that our third quarter results reflect the improvements in operations that we have implemented over the past six months," said company CEO and chairman J Patrick Kenny.

Net sales suffered partly due to working capital constraints, particularly in the second quarter, the firm said.

Kenny said: "We have stabilised our operations, allowing us to again focus on growing revenue through both existing and new distribution channels.

"In addition, we have strengthened our balance sheet through the reduction of payables and operating costs, which should allow us to become profitable as Mexcor increases distribution of our products."

The company said it will continue to reduce overheads from an annual $4.8m to $1.2m.