Lanitis Brothers Pcl (LB) released its preliminary 2005 results posting a disappointing performance as a net profit of CYP 280,000 reported for 2004 overturned into a net loss of CYP 1,170,000 for 2005. Last year’s profits were already marked lower from the preliminary stage where for 2004, LB had initially reported profits of CYP 464.000.
LB blamed the massive loss on non-recurring items amounting to CYP 860.000 with respect to provisions for bad debts and impairment in value of investments.
Total revenue increased by 13.2% to CYP 58.25 mln on the back of higher revenues from the production and distribution of refrigerated products (milk and dairy foods), the selling and distribution of Areeba mobile cards as well as the increase from the sale of beer through the Heineken Lanitis (Cyprus) venture.
Gross Profit decreased by 4% to CYP 15.45 mln, with the margin deteriorating significantly amid more intense competition from parallel imports (higher trade discounts offered), lower prices in certain CSD products as well as the new pricing policy agreement between LB and Heineken Lanitis for the sale of beer.
The Company suffered an increase in its operating cost structure on the back of higher energy costs, higher set up costs and payroll costs associated with Heineken Lanitis and increased provision levels. In addition, the Board changed its accounting policy relating to trade discounts offered to clients; thus burdening profitability by an amount of CYP 525,000, according to Egnatia Financial Services.
Total operating expenses increased by 2.1% to CYP 15.3 mln, while as a percentage of turnover, operating expenses were contained by 280bps to 26.3% in 2005. All in all, EBIT reached CYP 149.000 in 2005 compared to CYP 1.0 mln in the prior year.
Net Profit was burdened by a higher amount charged in 2005 relating to the impairment in the value of investments available for sale (from CYP 592k in 2004 to CYP 768k in 2005), an amount of CYP 334k representing share from loss arising from the joint venture Heineken – Lanitis and a higher tax charge which relates to prior year charges.
LB reported a net loss of CYP 1.170.499 compared to a restated net profit of CYP 280.124 in 2004. Losses per share were 0.47 cent from an EPS of 0.11 cent a year earlier.
In another development, Vladimiros Lanitis and Eve Lanitis resigned from their positions as the Chief Executive Director and the Commercial Director respectively effective as of 22 February 2006. The Board appointed Mike Spanos as the new Managing Director of the Company.
