Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

WDT widens 1H loss, warns FY earnings won't improve

Wellington Drive widens 1H loss, warns FY earnings won't improve

By Tina Morrison

Aug. 29 (BusinessDesk) - Wellington Drive Technologies, the unprofitable manufacturer of energy efficient motors, widened its first half loss and said full year earnings won't improve as sales slump in Latin America, its largest market.

The company posted a loss of $1.99 million, or 1.58 cents per share, in the six months to June 30, from a loss of $1.22 million, or 1.87 cents, in the year earlier period, the Auckland-based company said in a statement. Revenue fell 35 percent to $10.6 million.

Wellington Drive said first half sales in the Americas, its largest market, slumped 45 percent to $6.6 million as weak demand in Latin America prompted increased rivalry and pushed down prices. The weak demand in the region is expected to continue through the rest of 2014, it said today.

"We experienced strong competitive pressure in the Latin American region, as competitors fight for a smaller available market by adopting aggressive pricing and commercial offers to take share and win new projects. This has result in the company losing some share with two customers in that region," the company said. "We are adjusting guidance to now expect 2014 revenues to be lower than 2013 with the loss before interest and tax remaining at similar levels."

The latest forecast is a further downgrade from the company's expectations in June when it said it expected revenue to be in line with 2013's $27.4 million level, compared with its previous forecast for 2014 annual revenue of $30 million to $35 million. In June, the company was forecasting its annual loss and Ebitda to improve from 2013.

Wellington Drive said it is cutting costs, diversifying its customer base and developing new products to counter the downturn in revenue and is confident it will significantly improve its 2015 results.

"Current forecasts indicate that cash resources are adequate to fund the business in the medium term," it said. The company's 2013 annual accounts were tagged by auditor PwC over forecast cash flows. Wellington Drive had cash and cash equivalents of $4.85 million at June 30.

Shares in the company last traded at 11 cents and have declined 54 percent so far this year, the second-worst performer on the NZX All Index.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Stats: Auckland’s Population Falls For The First Time
In the wake of the COVID-19 pandemic, New Zealand’s population growth slowed down with Auckland recording a population decline for the first time ever, Stats NZ said today. “New Zealand saw slowing population growth in all regions... More>>



BusinessNZ: Third Snapshot Report Reveals $9.5 Billion Business Investment In Climate Action

Signatories to the Climate Leaders Coalition have committed to invest $9.5 billion over the next five years to reduce emissions from their businesses, as revealed in their third anniversary snapshot report released today... More>>

Digitl: The home printer market is broken
Printers are more of a security blanket that a serious aid to productivity. Yet for many people they are not optional.
Even if you don’t feel the urge to squirt ink onto dead trees in order to express yourself, others will insist on printed documents... More>>


Retail NZ: Some Good News In COVID Announcements, But Firm Dates Needed

Retail NZ is welcoming news that the Government is increasing financial support for businesses in light of the ongoing COVID-19 lockdown, and that retail will be able to open at all stages of the new “Covid Protection Framework... More>>

ComCom: Companies In Hot Water For Selling Unsafe Hot Water Bottles And Toys

A wholesaler and a retailer have been fined a total of $140,000 under the Fair Trading Act for selling hot water bottles and toys that did not comply with mandatory safety requirements. Paramount Merchandise Company Limited (Paramount) was fined $104,000 after pleading guilty in the Manukau District Court... More>>



Reserve Bank: Robust Balance Sheets Yield Faster Economic Recovery

Stronger balance sheets for households, businesses, financial institutions and the government going into the pandemic contributed towards maintaining a sound financial system and yielding a faster economic recovery than following previous deep recessions... More>>