Louis reports EUR 30.8 mln loss for 2008

Louis Plc (LUI) issued its 2008 preliminary results posting a loss of EUR30.8 mln compared to a profit of EUR 13.3 mln in 2007. Revenue decreased to EUR 273mln from EUR 314 mln in 2007. Revenue were adversely affected by the weakening of the US$ during 2008 since Louis Hellenic Cruises’ revenue from chartering of ships and revenue from onboard services is denominated in US$. According to Management, the Company follows a policy of hedging the volatility of the exchange rate by borrowing in USD but this policy did not prove adequate since the USD appreciated towards the end of the year resulting in unrealized forex losses. In addition the depreciation of the UK sterling resulted in a decline in revenue from onboard services.
Louis Hotels also posted a 4% decline in revenue due to less hotel units operating compared to 2007. EBITDAR decreased to EUR 39 mln from EUR 56.8 mln in 2007. Unlike the Cruise division, the Hotels division reported increased operating profits despite the decreased hotel units in operation. We also note the positive contribution in 2007 from the sale of Hilton Cyprus which adversely affects 2008 results on a comparative basis.
Excluding the one-off items in 2007 (sale of Hilton Cyprus and other property for a
profit of EUR 20.9mln) and 2008 (sale of Princessa Marissa and Serenade for a loss of EUR 7.6mln, the refinancing of Thomson Spirit and Thompson Destiny for a profit of EUR 10.9mln) the negative deviation in profitability between 2007 and 2008 stands at EUR 26.3mln (of which EUR 11.7mln is unrealized forex losses) instead of EUR 45.1mln.
Management expects 2009 to be a difficult year due to the financial crisis. The Company is taking the necessary actions to deal with the crisis and hence the lower expected revenue. However, the lower oil costs, the appreciation of the US$ and the stabilization of food supply prices are expected to positively contribute LUI’s results. Due to the low visibility of the expected market conditions Management, does not give any indication about 2009 financial performance.