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Abnormal costs in its balance sheets drove the South Pacific Stock Exchange-listed Pacific Green Industries (PGI) down a loss-making path in 2008.
PGI today announced a loss to its Group operations of $412,920 for its financial year ended December 31, 2008, despite sales revenue of more than $7 million.
"The economic climate that prevailed during 2008 was difficult, not only for many companies but also for many countries. Its most notable effects on our Group was the significant fall in revenue from the USA and a surge in manufacturing costs for our subsidiary Golden Palmwood," said PGI acting chairman Peter Ryan.
To counter that, the company upped advertising by 25 per cent to $675,000 during the year and continued to push growth in Eastern Europe and China.
"This strategy was successful as overall Group sales increased by four percent but it was not sufficient to absorb abnormal, "non-manufacturing related" losses
that the Group continues to carry particularly when production costs in China surged, reducing the Golden Palmwood profit to $221,656 ($1,092,719 in 2007)," Ryan said.
"It is also important to remember that abnormal costs, since the fire of November 2004, include legal expenses (exceeded $500,000) and losses of our non-operational Fiji manufacturing plant (average yearly loss in past four years is $1.6m) makes it apparent that our company will continue to lose money until the insurance case is finalised and the primary manufacturing plant can be rebuilt.
“These factors and the adoption of the new financial reporting requirements (which effectively reduced profit a further $816,000) resulting in a loss to the Group of $412,920 on sales of $7,636,070."
The company however reported an overall improvement in liquidity and reduction of debt while no dividend was declared.
PGI last traded at $2.20 per share at SPSE.
