CEDC cuts profits outlook
for the coming financial year because of a charge for the
re-evaluation of a deferred tax asset.
The company says that it is now projecting net sales of $515-$525 million and net income per share of $1.83-$1.90 - which includes a tax reduction benefit from the Polish government - based on estimated diluted shares outstanding of approximately 11.2 million for full year 2004. Analysts are currently estimating income per share of $1.82.
This company also stressed that its guidance did not take into account any acquisitions that it may make in 2004. In recent months the company has been acquisitive and expects to remains so in the course of the next financial year.
The company said that the one-time reduction in the corporate income tax rate (CIT) will be accretive in terms of increased profitability and cash flow and will add approximately $0.17 to earnings per share in 2004. However, due to the revaluing of the deferred tax asset at the lower tax rate, there will be a one-time charge of approximately $0.05 per share for the fourth quarter 2003 and as a result, the company said it would adjust its 2003 earnings per share guidance to $1.43-$1.46 from $1.48-$1.51.
William Carey, president and CEO, said: "We applaud the Polish government for reducing the CIT, as the overall effect for us is overwhelmingly positive. As we approach the end of our busiest quarter, we are in line with our full-year earnings estimates (net of the deferred tax effect) and are confident that we will continue to deliver strong operating profit and bottom-line results.
"We are pleased to see the economy strengthening as the Polish government has raised projections of GDP for the fourth quarter 2003 to 4.5 per cent from 4.3 per cent. We continue to have discussions with potential alcohol distribution acquisition candidates and are committed to achieving a 40 per cent domestic vodka market share through acquisition and organic growth in the next 12-14 months, up from a 30 per cent share today."
CEDC is one of the leading importers of beers, wines and spirits, as well as the largest distributor of domestic vodka on a nationwide basis in Poland. The company operates nine distribution centres and 58 satellite branches throughout Poland. It distributes many of the world's leading brands, including Johnnie Walker Scotch, Stock Brandy, Jose Cuervo Tequila, Sutter Home, Torres, Mondavi and Concha y Toro wines, Corona, Beck's, Foster's, Budweiser Budvar and Guinness Stout beers.
