Sabate Diosos announces half yearly results
half results have been impacted by bad weather, surplus production
capacity and a slowdown in orders.
French cork and barrel maker Sabate Diosos has said that poor first half results have been impacted by bad weather, surplus production capacity and a slowdown in orders.
Overall the group's turnover fell from €108.2 million to €93.6 million in the first half of 2002. This represented a drop of €14.6 million. Operating profits fell from €3.2 million to €1.9 million. Consolidated net profits were down from €20.8 million to €5.8 million.
The barrel division, which is traditionally slower in the first half of the year, represented 40 per cent of the group's turnover. The drop in the operating profit reflects the slowdown in activity, but also the provision of €1.1 million made to cover the financial risk of excess stocks. However, the company pointed out that it still managed to sell 203,000 barrels in this first half.
The cork division represented 55 per cent of the group activity, suffered from the combined effects of both still and sparkling wines as well as the current lawsuit in the US against Altec.
Cost savings which have been made over the last few months, including the reduction of staff numbers by 98 to create a total workforce of 138, have partially compensated for the loss of sales, the company said.
The reduction in staff has helped reduce losses and positively impacted the group's cash flow, in spite of the drop in sales. Careful attention has continued to be given to the company's operations during the first half of the year, and a specialised consultant has been appointed to sell the company as soon as possible, it said.
The group also pointed out that an increased focus on reducing stocks and collecting trade receivables, together with a stricter control over the choice of investments have helped generate a positive operating cash-flow which has improved compared with 2001. This has allowed the group to reduce its debt by €6.8 million compared with the situation at the end of June 2001.
Against a difficult market background, Sabate Diosos is maintaining its turnover forecast of € 200-210 million (Corks €91-96, Barrels €101-106, Floors €8) and anticipates an operating profit of between 5 to 7 per cent. The drop in the operating profit compared with 2001 is mainly due to the Cork division.
