Luxury goods group Waterford Wedgwood has reported a sharp drop in earnings for its financial year to the end of March, as the weak dollar led to a sharp fall in sales of its crystal and ceramics products. The company had warned earlier this month that its earnings would be lower than expected.
Earnings before interest, tax, depreciation and amortisation were €68m, compared with €115m in the previous year. Total sales were 12.6% lower at €832m, while there was a pre-tax loss of €44.9m, compared with a €7.2m profit a year earlier. The company will not be paying a dividend.
Chief executive Redmond O'Donoghue described the year as challenging, saying the company recognised that the results were not satisfactory. He said the first six months were particularly tough due to the Iraq war and SARS, while the weakness of the US dollar had also been unhelpful. About half of its business is denominated in dollars.
Mr O'Donoghue said the company's fortunes could not be contingent on exchange rates or other external factors, and it had begun to implement a Plan for Growth. The recent sale of its US cookware business All-Clad for $250m was the first step in this programme.
The proceeds will be used to cut Waterford's €383m debt. The company also wants to free up cash for more marketing by reducing working capital.
Waterford has also announced that All-Clad chief executive Peter Cameron will become chief operating officer, while current chief financial officer Paul D'Alton has joined the board.
Waterford Wedgwood shares slumped 3.6% to just under 16 cent in Dublin this evening.
