Dutch food group Wessanen has reported a second consecutive quarterly net loss, due to a poor performance at its core US unit and an unexpected charge on writedowns on a US IT system.
The company reported a second-quarter net loss of €22.6m (US$24.7m), compared with a profit of €12.2m a year earlier. Analysts had been expecting a profit of €0.72m, but had not expected the charge that the company booked for a further writedown on an IT system in the US, other asset write-offs in the US and a severance package for the company’s former CEO, reported Dow Jones International News.
Wessanen said it expects third-quarter profit to be in line with the first and second quarters, based on profit after tax before goodwill and extras, which was €0.2m in the second quarter and €1m in the first quarter. The company added, however, that it expects a substantial improvement in the fourth quarter.
Wessanen also announced a cost-cutting programme aimed at reaching €100m in annual cost savings by the end of 2004. These cost saving are to be achieved by reducing management layers, improving efficiency, creating synergies between different brands and optimising procurement. Between 500 and 700 jobs are to be cut as part of the programme, on top of the 300 job cuts in the US that have already been announced. It is not clear over what time frame the job cuts will be made.