CANADA: Impairment charge drags Cott Corp. down in Q3
Cott Corporation has seen impairment charges in its third quarter hammer its net profit deeper into the red.
The Canada-based retailer soft drink provider said today (6 November) that net loss in the three months to the end of September leapt to US$87.6m, compared to a loss of $5.8m in the corresponding period a year earlier. Sales slowed in the quarter, down to $420.5m from $464.5m.
During the three-month period, Cott recorded $95.8m in non-cash asset impairment charges, $69.2m of which was a write-off of goodwill associated with the UK business and $26.6m of which was a reduction in the carrying amount of the North American intangible related to CSD concentrate production capabilities to its estimated fair value. "These charges were based on the results of interim impairment tests, performed in connection with the preparation of our financial statements, necessitated by the continued volume declines in the CSD category in North America, and lower than expected volume and gross margin performance in the UK," the company said.
Operating loss, therefore,was $90.5m compared to operating loss of $3.7m for the comparable prior year period.
Stripping out these charges, however, saw operating profit rise by 6.2% year-on-year to $12m from $11.3m.
In the year-to-date, revenue and beverage case volume declined by 6.3% and 8.3%, respectively, as a result of "continued CSD category decline and increased national brand promotional activity".
Cott's operating loss in the year-to-date stands at $97.4m, compared to operating income of $18.1m in the first nine months of 2007. Year-to-date restructuring and asset impairment charges were $102.8m , compared to $24.4m in the prior year. Minus these charges, Cott would have generated $26.6m of adjusted operating profit year-to-date compared to $42.5m of adjusted operating profit in the comparable prior year period.
The company also said that it received notification from the New York Stock Exchange yesterday advising that, as of 31 October, it was not in compliance with one of the continued listing standards of the NYSE because the average closing share price of the company's common shares had fallen below $1.00 per share over 30 consecutive trading days.
Cott said that it is currently exploring alternatives for curing the minimum share price deficiency and has notified the NYSE that it intends to cure the deficiency.
Cott Corporation has swung from loss to profit in the first quarter of this year....
UK soft drinks company Cott Beverages (Cott UK) is launching its own brand, Bare All this month....
Struggling soft drinks group Cott Corp has said it is pleased to be done with 2008, after seeing losses rise by around 75% for the year....
Cott Corp. has confirmed the appointment of its new CEO....
- Interview - Bacardi global marketing boss, whisky
- Comment - Hybrid Spirits: Innovation or Laziness?
- Has Coca-Cola Jumped From Frying Pan to Fire?
- Constellation grapples with glass as reality bites
- Brewers Feel Prolonged Russian Winter
- Mast-Jägermeister targets UK off-trade boost
- Diageo doubles intake for spirits start-ups scheme
- Second senior exec to depart Bacardi
- Portman finds against Diageo "mix it up" tagline
- Bacardi sees North America president step down