Despite a gain in sales and in operating profit, Head N.V. has reported a net loss for the fourth quarter that ended Dec. 31. The loss of €1.3 million compares with a profit of €700,000 for the same period in 2007. It comes even though sales grew by 5.4 percent to €115.1 million and the reported operating profit increased by 53.2 percent to €7.2 million. Excluding special charges, the operating profit would have been €9.8 million, an increase of 60.7 percent.
For the full year, sales crept up by 1.6 percent to €326.0 million, with a higher operating profit of €1.9 million compared with a €700,000 loss for all of 2007. Excluding special charges it would have been €900,000. The net loss for the year was slightly better than for 2007 at €9.7 million, compared with a negative €11.2 million in 2007.
The company credits its winter sports gear for its fourth-quarter success, reporting an 11.0 percent increase in that category compared with the same quarter 2007. Racquet sports remained nearly flat, while the diving division did just that, with sales down by almost 6 percent and the gross margin falling nearly 10 percentage points.
For the full year, however, diving sales grew by 1.0 percent with the strength of new advanced products just outweighing negative currency effects and the overall economy. For the year, winter sports grew by 11.3 percent and racquet sports dropped by 6.5 percent because of an unfavorably product mix.
The quarterly gross profit fell by 0.3 percentage points to 36.9 percent; for the year it decreased by 0.9 percentage points to 37.8 percent. Increased costs of raw materials and energy, as well as the unfavorable mix in racquet sports, were largely to blame, the company said.
The company sees 2009 as challenging with the ongoing financial crisis, and plans to control its working capital and focus on sales after already cutting costs.
