A year of restructuring for YALCO Group
The largest part of the negative results is due to the non-recurring costs of the restructuring
In the context of confronting the difficult economic circumstance of the last 2 years, both in Greece and in the rest of Balkan countries, the Company continued intensively the implementation of the restructuring plan for the whole of its activities, which is to be completed within 2010, targeting to secure its mid- to long-term sustainability and profitability.
The nine-month results of the Company and the Group do not reflect its operational performance given that they do not embed in total the positive results of the implemented restructuring actions, while on the contrary they include their full implementation costs.
Company sales in the nine-month 2010 period reached €21.4 million, reduced by 31.9%, while on respective Group level nine-month sales were €31.9 million, reduced by 25.4%. The decrease in sales derived to a large extent from the reduction of parent company sales, but also from the rationalization of the retail network of Omnishop and the discontinuation of the loss-making activity in Hungary.
The company recorded losses after tax of €4.7 million, compared to earnings of ?1.7 million in 2009. At Group level, the results amounted to losses of ?5.7 million compared to losses of €1.1 million in 2009. The results both at parent and Group level include non-recurring restructuring costs that exceed ?3.7 million, without at the same time depicting their full financial benefit. Additionally, we have to note that significant part of the non-recurring expenses during 2010 were of accounting rather than of cash nature.
The Group proceeded in 2010 to the radical restructuring of all its activities targeting the immediate return to profitability. Significant part of the restructuring constitutes the management decision for the absorption of subsidiary companies Excel and Omnishop, the activities of which - after the utilization of the synergies from the absorption - is estimated to have positive contribution to parent company results. The absorption process will be completed within December 2010.
At the same time, it is estimated that the positive course of YALCO Romania in the nine month period, the sales of which amounted to €4.2 million increased by 43% versus 2009, will continue both in the last quarter of 2010 as well as in 2011. The taking over of new brand representations, and the expansion of the clientele that took place within 2010 will form the basis for the further development of activity in Romania.
YALCO having completed and fully financed its restructuring up to end-2010 will be ready to address with optimism the challenges of 2011, looking forward to the immediate recovery of its results.