Nu world
Competition and recession take toll
October 6, 2009
By Florence de Vries
The restructuring of Nu World would not be enough to improve second-half headline earnings as consumers came under pressure, the small appliances manufacturer said yesterday.
Nu World attributed its expected earnings decline of between 35 percent and 45 percent for the year to August to adverse trading conditions in its offshore and local manufacturing operations, saying it had been forced to reorganise these plants in light of the recession.
Intense competition in South Africa and Australia has eroded the margins of the group, which makes JVC, Ideal and Telefunken appliances. The JSE-listed firm said the local division was receiving particular attention in terms of downsizing, as small appliances that were no longer cost-competitive to make locally were being outsourced to the East. Headline earnings a share, which fell 48.1 percent at the interim, were expected to drop by between 25 percent and 35 percent for the full year. The shares were unchanged at R14.10. - Florence De Vries
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