Southcorp dives into the red
Southcorp has announced its first-ever loss and has warned of further writedowns. The winemaker said it will post a pre-tax loss of $12.8 million this financial year and will scrap its final dividend. The loss was attributed to a slump in wine sales and $60 million in one-off costs, including $11 million in redundancies.
Net debt is forecast to rise from $703 million to $941 million while cash flows will fall to minus $5 million. Earnings before interest and tax for the year is expected to be between $130 million and $140 million less than half of 2002's $287.1 million. Second-half EBITA is forecast to be $46-$56 million, compared with $158.5 million in 2002. Investors dumped their Southcorp shares after the announcement, sending the closing share price to a seven-year low of $3.10 – down 16.4 per cent or 61 cents.