Wimm-Bill-Dann Foods Swings To Net Loss

Currency translations and surging financial expenses hurt the European dairy and beverage producer in the fourth quarter.
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On March 18, 2009,

Wimm-Bill-Dann Foods


reported that it swung to a net loss during Q4 FY08, hurt by a multi-fold surge in financial expenses and the negative impact of currency translations. Net loss was $7.90 million compared to a net profit of $34.40 million in the year-ago quarter. Excluding foreign currency revaluation effect and adjustments for tax, the company's net income rose 12.6% to $32.50 million. The latest quarterly consensus estimate was EPS of $1.99.

Revenue decreased 7.4% to $629.40 million from $680.00 million in the prior year's quarter. Looking at the company's business segments, Dairy revenue decreased 11.0% to $465.80 million from $523.80 million. Additionally, Beverages revenue slipped 2.7% to $100.70 million from $103.50 million, while Baby Food revenue climbed 19.3% to $62.90 million from $52.70 million.

During the latest fourth quarter, the company's gross margin improved 258 basis points to 32.73% from 30.15% in the comparable quarter last year. Selling and distribution expenses grew 15.3% to $122.40 million, while general and administrative expenses narrowed 32.1% to $34.90 million. Subsequently, operating margin surged 146 basis points to 8.18% from 6.72%. Furthermore, financial expenses multiplied to $65.00 million from $1.40 million. Meanwhile, WBD incurred a capital expenditure (excluding acquisitions) of $36.40 million, down 44.0% from $65.00 million in Q4 FY07.

Wimm-Bill-Dann's net sales for FY08 grew 15.8% to $2.82 billion from $2.44 billion in the previous year, driven by higher prices across segments. However, net earnings deteriorated 27.3% to $101.71 billion or $2.31 per share from $140.05 billion or $3.18 per share in FY07, due to a sharp increase in financial expenses.