Wessanen 2009 Q2 Operating Result in Line with Outlook But Bottom Line Affected by Impairments
Increase of 4.8% in revenue to EUR 408.5 million, reported operating loss of EUR 5.4 million (operating profit of EUR 7.3 million, excluding impairments and other incidental results at ABC.
30 Jul 2009 Frans Koffrie, Wessanen CEO, comments: “The operating result in the second quarter, excluding North America Branded, amounted to EUR 7.0 million, which is slightly higher than last year’s EUR 6.1 million, excluding incidental gains. Our European and North American businesses performed well, with revenue and comparable operating profit approximately at the same level as last year. The bottom line performance of the Group in the second quarter of this year was significantly tainted by the deferred tax asset write-downs and impairment charges at ABC.
The investigation into reporting irregularities at ABC has nearly been finalized and a forensic investigation has been initiated. We conclude that the equity position at Royal Wessanen nv at year end 2008 was overstated by approximately EUR 15 million, some EUR 5 million higher than indicated on June 15, 2009. The review to divest ABC has been put on hold, while a recovery plan is in progress to ensure that the business will be profitable again. Nevertheless, we still intend to pursue a divestment of ABC in due course. The investigation into a possible divestment of Tree of Life is progressing in line with expectations, and has not been affected by the events at ABC.
We are very pleased with the additional headroom provided to us in the amended main credit facility. The increased tolerance for leverage (net debt/EBITDAE) allows for the impact of operating losses at ABC incurred during the first half year in 2009 and provides us a sensible timeframe to divest our North American businesses. Our net debt continued to decline this quarter to EUR 204 million.
We are making progress in formulating our European growth strategy. We expect to provide more detail later this year, when we have concluded the strategic review of our European business.”
