US: CEDC ends 2010 in the red after tough '09 comparables
CEDC has had a lively end to 2010
Central European Distribution Corporation has seen profits turn to losses in 2010, despite a lift in sales for the year.
The US-based spirits company, which operates primarily in Central and Eastern Europe, said earlier today (1 March) that net losses for the 12-month period came in at US$104.7m, versus net profits in 2009 of $81m. Net sales rose, however, by 3.2% to $711.5m, with operating losses totalling $23.6m compared to operating profits of $184.5m.
In the final quarter, net sales slipped by 10.5% year-on-year to $228.4m, as net profits fell by 82.7% to $12.2m.
By its own admission, CEDC had a lively run-in to the end of the year, with its biggest new product launch in Poland with the Zubrowka vodka variant, Biala, and a “production issue” in Russia in November, which halted “a significant portion” of CEDC's production for around two weeks.
“Although we are coming off of a disappointing 2010, which included a number of unplanned events that have had a substantial effect on our overall profitability for 2010, we are encouraged to see that our market shares in our core markets are increasing, especially in Poland,” said CEDC's president and CEO, William Carey.
Looking to 2011, the company said it expects full-year net sales to come in in the region of $880 and $1.08bn, and issued comparable fully-diluted earnings per share guidance of between $1.05 and $1.25.
Back in November, CEDC pronounced itself “disappointed” by its Q3 performance in 2010, as a heatwave and Russia's fires hampered its performance. The company noted at the time that net losses for the year so far were in part down to a one-off gain in the first half of 2009 relating to its acquisition of Russian Alcohol Group in April 2009. It was also hit by an impairment charge of $28.2m in the first nine months of 2010.
To read the official release, click here.
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