CEDC - CEDC quarterly loss widens, shares sink
Wed Feb 29, 2012 8:20am EST
* Loss/shr from cont ops $6.29 vs $0.17 last year
* Q4 rev $280.1 mln vs $228.4 mln last year
Feb 29 (Reuters) - Polish vodka maker Central European Distribution Corp, which is struggling with mounting debt, reported a wider quarterly loss due to lower sales in Russia, its largest market, sending its shares tumbling 28 percent in premarket trading.
CEDC, facing debt maturities of more than $300 million next year, has concluded that cash generated from operations, cash on hand and existing credit facilities will not be sufficient to pay principal on the notes due 2013.
The maker of Absolwent and Parliament vodka said it continued to consider a proposal from its top shareholder and Russian billionaire Roustam Tariko who offered to help it repay debt in exchange for a bigger stake in the company.
CEDC will also consider alternatives including the sale of certain assets, exchange of convertible notes and issuing equity to meet its financial obligations, it said in a statement.
The company has been wrestling with persistent spirit price increases and lower demand in the key Russian market, leading to heavy discounting.
CEDC outlined plans to cut costs and raise prices in the region. It named a new general manager for Russia, starting April 1.
For the fourth quarter, CEDC's loss from continuing operations widened to $456.1 million, or $6.29 cents a share, from $132.19 million, or 17 cents, a year ago.
Excluding one-off items, the company earned 11 cents a share.
Sales rose 22 percent to $280.1 million.
Two analysts on average had expected earnings of 33 cents a share, excluding special items, on sales of $293.9 million.
Last week, CEDC's second-largest shareholder Mark Kaufman said he intended to contest for a board seat.
CEDC shares, which have gained 22 percent since Tariko made his proposal earlier this month, fell 28 percent before the bell on Wednesday. They had closed at $5.42 on Tuesday on the Nasdaq.
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