Report from BusinessDesk by Hannah Lynch
Wellington Drive Technologies, the unprofitable Auckland-based maker of energy-efficient motors, said it has embarked on a drive to slash costs and lift cash flow.
The net loss was $14.7 million in calendar 2011, little-changed from $14.8 million a year earlier, the company said in a statement today. Sales increased 25 percent to $35 million. The company said its annual result included a one-time charge of $5.2 million after the closure of its ventilation business and changes to the group’s structure.
Operating costs increased to $13.3 million from $12.6 million.
The company has embarked on various capital raising initiatives to keep the business afloat as it struggles to achieve profitability. It has launched a restructuring program designed to reduce costs and improve cash. The restructuring actions are targeted at a more disciplined approach to growth in an attempt to deliver a self-funding path to profit, it said today.
“The strategic and operating review will continue through the first quarter of 2012 as is focusing on every area of Wellington business practice, operating process, supply chain and stakeholder relationships,” the company said.
“The core commercial refrigeration business will be the primary market focus in 2012,” it said. “This segment continued to make progress through 2011, demonstrating strong sales growth (up 44 percent).”
The company’s sales increase reflected expansion into the Latin American and Mexican markets, up 39 percent on a year earlier. Its European business had year-on-year sales growth of 52 percent even as the second half showed as the regions sovereign debt crisis continued to worsen.
Sales in the Asia-Pacific region dropped 21 percent following a decline in smaller customers.
The company had $3.6 million of cash or the equivalent on its balance sheet as at Dec. 31, up from $2.9 million a year earlier. It is forecasting its cash position will be at its lowest level in the first quarter as it ramps up production to meet demand.
The board made no mention of a dividend to shareholders.
Its shares rose 5.3 percent to 20 cents are currently trading at 19 cents on the NZX, with 18,600 traded. The shares briefly traded above $7.50 in January 2004.