Waterford Wedgwood Losses Narrow, Says It's Turning Toward Profit
Waterford Wedgwood, one of Ireland's best-known companies, reported continued losses and sales declines Wednesday in its full-year results, but said more cost-cutting and share offerings could return it to profit.
For the year ending March 31, the maker of luxury crystal and china reported a net loss of 71.2 million euros ($95.7 million), compared with a loss of 188.9 million euros in losses in the previous fiscal year, when it bore the brunt of paying off workers and closing plants.
Sales fell 4% to 741.5 million euros ($996.6 million), while debt rose 10.9% to 412.2 million euros ($554 million).
The company said its program to slash costs by 90 million euros a year, unveiled in May 2005, was largely complete. Since then, Waterford Wedgwood has laid off 2,200 employees, closed down its second crystal plant in Ireland and a china plant in England, and combined operations with an English-based claywares rival, Royal Doulton.
"The results we are announcing today demonstrate the achievements of the cost-rationalization program and our product development and marketing initiatives," said chief executive Peter Cameron.
He pointed to the fact that the company, for the first time since 2003, was reporting a profit in earnings before interest, taxes, depreciation and amortization _ of 15.0 million euros ($20.2 million), compared with a 30.9 million euros loss last year.
The group's designers also have launched new lines of tableware using technology designed to appeal to younger, practical tastes. That means a new formulation for Waterford's Lismore pattern of crystal that is 35% lighter, and a range of Wedgwood bone china that doesn't break as easily and works in microwaves and dishwashers.
But the company continues to suffer from the U.S. dollar's weakness versus the euro. Americans traditionally account for about half of all global sales of Waterford crystal products.
The chairman, Sir Anthony O'Reilly, and deputy chairman, Peter Goulandris, already own 51.35% of the company. They agreed this year to buy an additional 100 million euros ($135 million) in shares either directly or through a company they jointly own.
Waterford Wedgwood is also offering other shareholders the chance to buy 100 million euros more in hopes of cutting debt and investing more in marketing products.