Maesa reports loss but sticks to sales target

By Leah Armstrong

- Last updated on GMT

Related tags Revenue Maesa

Contract manufacturer Maesa has released disappointing first-half earnings figures, but remains committed to its €100m revenue target for 2010.

Maesa has four divisions: beauty, promotions, home and packaging. It describes business as ‘mixed’ throughout the first half of this year, with varying degrees of success and decline across each division. Although overall the company experienced 21 per cent growth in revenues, this was spoilt by a loss of €2,869m in net income.

Decline in first half of year

Maesa has stated that this downturn is linked to the economic situation. A loss in sales in the automotive sector at Maesa SA was one of the major factors in this decrease. The dependence of its promotions division on the publishing industry has also negatively affected figures.

Additionally, one-off non-recurring expenses cost the company €370 000. This was to pay for restructuring costs for the Europe Division, relocation of head office and the setting up of a Chinese subsidiary in Shanghai.

In January of this year, Maesa bought fellow contract manufacturer Zorbit Resources for between $45m-$50m. Including the sales from this acquisition, Maesa’s pro forma revenue was up from €16,464m to €27,743m, an increase of 68 per cent.

Positive outlook for second half of year

Maesa sticks by its revenue target of €100m for FY 2009-10. There have been serious losses in the first half of this year, but the company believes it has the strength in new contracts to offset this decline and maintains that “the market to be conquered is still vast, even- and indeed above all- during a crisis period”.

Maesa remains hopeful that the high number of contracts recently signed will boost sales over the second part of the year. This includes a range of suncare products called ‘Systeme U’ in French supermarkets and the launch of a beauty range for Oviesse in Italy.

In addition, the company has alluded to a deal with a ‘major retail clothing brand’ in the US, for which it is producing an entire home, beauty and make-up range.

Although the company admits to grave losses in its contracts for car fragrances, it states that the decline in the automotive business will be offset by the launch of fragrance diffusers for new manufacturers expected for the end of 2009.

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