KarstadtQuelle posts losses on lower 2004 sales
12 April 2005, ESSEN - Embattled German department store and mail order concern KarstadtQuelle reported on Tuesday its earnings before taxes and interest, depreciation and amortisation (EBITDA) showed a loss of EUR 428 million in 2004 amid the heavy costs of restructuring and a decline in sales.
12 April 2005
ESSEN - Embattled German department store and mail order concern KarstadtQuelle reported on Tuesday its earnings before taxes and interest, depreciation and amortisation (EBITDA) showed a loss of EUR 428 million in 2004 amid the heavy costs of restructuring and a decline in sales.
The figure, following an EBITDA surplus of EUR 972 million in 2003, comes as the company absorbed restructuring costs of EUR 1.44 billion.
Earnings before taxes and interest (EBTA) showed a deficit of EUR 1.63 billion, as sales revenues fell 6.8 percent to EUR 13.45 billion, KarstadtQuelle said.
But chief financial officer Harald Pinger said the company is now on schedule with its restructuring and that EBITDA for 2005 is expected to show a surplus of more than EUR 500 million.
"Today our financial position is sound and assured, the reorganisation which we initiated in September 2004 is on track," said Pinger, presenting the results as interim chief executive after the resignation last week of Christoph Achenbach.
"We will continue to consistently implement the programme in 2005," Pinger added.
Among other developments, he reported that KarstadtQuelle reduced its net debt by 16 percent to EUR 2.83 billion, while divestments had improved liquidity by EUR 400 million.
The company said it had letters of intent for the sale of its specialty stores SinnLeffers, Wehmeyer, Runners Point and Golf House, while personnel costs were expected to be reduced by EUR 760 million in the 2005 to 2007 period.
"We have acted decisively and proactively in the year of crisis 2004 to make a fresh start. 2005 will be a year of implementation, and here we are partly performing better than planned," Pinger said.
"From 2006 onwards, the KarstadtQuelle Group with its totally new profile will achieve growth again."
KarstadtQuelle said that after a weak start in January, sales had picked up in February and March, but that the first-quarter group sales were still down by 8.6 percent from the same 2004 period.
However, with further divestments and the restructuring, the company said it expects operating EBITDA of over EUR 500 million, slightly above the company's November 2004 projection.
Subject: German news