In its Stock Exchange Release of 23 November 2004 the Group mentioned the likelihood of a full or partial write-down of goodwill in relation to North America. Having completed the assessment of this measure, the Group has decided to write down the entire amount in capitalised goodwill, a
total of DKK 56 million at 31 December 2004.
The write-down will not affect the Group's cash resources and all other expectations for the Group's full year result for 2004 remain unchanged.
The main reason for the write-down is the development in the rate of USD against CAD which has an adverse effect on earnings in North America. Since the decision was made to invest in North America, the USD rate has dropped some 25% against CAD. As previously announced, the
Group originally expected earnings to generate an annual operating profit in the range of DKK 40 million once the plant had been fully run in. If the present rate of exchange between USD and CAD remains unchanged, this factor alone will reduce the operating result for North America by
approx. DKK 30 million.
The Group is currently working on measures that will compensate for the effect on the operating result of the decline in the USD rate. In its assessment of the goodwill write-down the Group has not taken account of the effect of such measures.
The Stock Exchange Release of 23 November 2004 included expectations of a negative operating result for the Group in 2004 of up to DKK 65 million including DKK 50 million in restructuring costs and write-downs related to the Focus Plan. Allowing for the goodwill write-down of DKK 56 million, the Group now expects an operating result for 2004 which is negative in an amount of up to DKK 121 million and after tax a loss of up to DKK 126 million.
Brødrene Hartmann A/S
Bjarne Eriksen Asger Domino
Chairman of the Board President & CEO
The press release can be downloaded from the following link:
