Waterford suffers as sales slump
A once-off gain on the sale of an American subsidiary allowed the company to report a pre-tax profit of €8.9 million for the six months to September, which compared with a loss of €44.8m last year.
But the company's underlying slump was revealed by sales tumbling almost €50m to €356m, while operating profits of €4.2m last year were turned into losses of €21.4m.
Chief executive Redmond O'Donoghue said the results were not good enough but the group would recover.
"Although market share was maintained, sales in the six months were disappointing," he said. "Our group and our industry continue to face challenging times."
Revenues were down across the board, with crystal sales falling 11% and ceramics down 7%.
The company suffered from continued weak demand and the slide in the dollar, which meant sales in America, representing 50% of the group's total, were worth less in euro terms.
But current sales orders suggested the worst was nearly over the group, Mr O'Donoghue said.
October figures were 10% down on last year, but November had been better and was close to matching the 2003 level.
Mr O'Donoghue said Waterford's proposed takeover of chinaware manufacturer Royal Doulton, which was announced at its AGM last month, would benefit the company by boosting group sales without a substantial increase in costs. A successful takeover would allow Waterford to use up spare capacity at its plant in Britain to manufacture Royal Doulton products.
The company took a €25m hit after revaluing its goods made but not yet sold. But analysts were disappointed stock levels remained high at €289m.
Mr O'Donoghue said short-time working arrangements would help bring the stockpile down and take pressure off working capital requirements.
The sale of American cookware subsidiary All-Clad brought a welcome cash injection of almost €200m during the period.
Most of this went to slash the company's debt burden, which fell from €430m to €280m. A change in Irish tax law earlier this year was worth €20m to the group, by exempting it from a Capital Gains Tax bill on the €103m profit arising from the disposal.
Chief operating officer Peter Cameron said the company's position would improve.
A 5% price hike had been accepted by retailers and new product lines and marketing initiatives would boost sales in the years ahead, he said.
Sales tumble almost €50 million to €356m.
Operating losses of €21.4 million, down from a profit of €4.2m last year.
Weaker demand and dollar slide to blame.
But progress on reducing debt and stock levels.
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