Thomson posts sharp net loss in 2004

3rd March 2005, Comments 0 comments

PARIS, March 3 (AFP) - The French electronics group Thomson posted Thursday a sharp net loss for 2004 as it spun consumer activities off to Asian firms and focused on serving major media and entertainment groups.

PARIS, March 3 (AFP) - The French electronics group Thomson posted Thursday a sharp net loss for 2004 as it spun consumer activities off to Asian firms and focused on serving major media and entertainment groups.

Thomson reported net loss of EUR 636 million (USD 835 million), compared with a profit of EUR 26 million a year earlier, on a 4.9 percent drop in sales to EUR 7.99 billion.

A major factor in the loss were provisions of EUR 904 million, including EUR 667 million to cover second-half restructuring costs at the group's displays division, which manufactured television tubes and components.

Looking ahead, Thomson said sales would grow 10 percent this year at constant exchange rates in its media and entertainment divisions, now the group's focus of activity.

A company statement quoted chairman and chief executive Frank Dangeard assaying: "Our two-year plan is now in place for each of our business units.

"These roadmaps enable us to reconfirm our 2006 targets: revenue growth of EUR 1.5 to 2 billion at stable margins, and cumulative free cash flow generation from 2004-2006 of EUR 1.2 to 1.5 billion."

The group released two sets of results, one reflecting its previous structure and another setting out results for what it called the "core group" expected to arise when restructuring was complete.

It decided last year to stop making television sets, leaving that to Chinese partner TCL, which owns the majority stake in a joint venture that created the world's largest television manufacturer.

On January 26, Thomson said it would transfer production of cathode ray tubes for television sets to the Indian company Videocon.

Under the French group's previous structure, 2004 operating profit fell to EUR 434 million from 508 million, well below a median analyst consensus drawn up by JCF group in Paris of EUR 561 million.

Net debt at the end of 2004 was EUR 679 million, compared with EUR 244 million a year earlier, reflecting acquisitions made in the meantime.

Thomson said it would pay a dividend of EUR 0.285, up 10 percent from EUR 0.26 in 2003.

The group has repurchased 5.6 million shares under a buy-back program launched in September.

On Thursday, Thomson shares gained 1.4 percent to EUR 20.21 in midday trade on the Paris stock exchange, while the CAC 40 index of leading shares was stable at 4,061.47 points.

A Paris-based analyst said: "Overall, the company's figures look OK, although operating profit and the company's broadband business was rather disappointing."

Cheuvreux analysts kept their "underperform" rating on Thomson, saying the EUR 434 million operating result was significantly lower than expected.

The French broker commented on Thomson's outlook, saying: "The company's full-year 2005 top-line guidance of 10 percent growth for core business looks optimistic in our view."

© AFP

Subject: French News

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