CANADA: Rising costs, falling currency drag Andrew Peller into the red

Andrew Peller has seen the "precipitous decline" in the value of the Canadian dollar drag on its profits in its fiscal full-year.

The Canadian wine company said late last week that it saw net profits of C$11.4m (US$10.1m) in the 12 months to the end of March 2008 turn to a net loss of C$125,000 in the year to the end of March 2009.

Sales for the fiscal year, however, climbed by 9.8% to C$268.2m. Stripping out the impact of acquisitions, sales grew by 5.7% to C$258.2m.

In the final quarter of the year, sales rose to C$60.1m from C$54.7m, while net losses came in at C$3.2m from a net profit of C$802,000 a year earlier.

"We were pleased with the company's performance in view of the severe economic challenges presented to us, particularly over the last quarter of our fiscal year," said company president and CEO, John Peller. "While we experienced strong organic growth in our sales during fiscal 2009, our profitability was impacted by the significant deterioration in the value of the Canadian dollar over the last six months of the fiscal year and by the increase in costs for grapes and wine both domestically and internationally."

Peller noted that input costs have now stabilised and that the company is "taking a number of aggressive steps" to reduce costs and enhance production and operating efficiencies. "These initiatives are expected to result in improved performance in fiscal 2010," he added.