Improved inventory situation at KappAhl

23 Dec '11

4 min read

The increased purchasing costs have been due to suppliers' shortage of capacity, rising raw materials costs and increasing payroll expenses. However, now the situation regarding access to production capacity and raw materials costs is considerably better and regarded as normal. This will have a positive effect going forward.

Selling and administrative expenses for the quarter have decreased to a total of SEK 681 (704) million, despite an increased number of stores and general inflation. This shows that the savings initiated at the beginning of the summer are clearly having an effect.

The operating profit was SEK 16 (146) million, a decrease of 89 per cent. This is equivalent to an operating margin of 1.3 (10.9) per cent. The deterioration in earnings is due both to weak sales and to a lower gross margin.

Depreciation according to plan was SEK 41 (55) million, which was affected by a changed assessment of real useful lives – see further under accounting policies.

Net financial income was SEK -26 (-17) million for the quarter. Rising interest expenses are for the most part due to higher debt and to a lesser extent due to the new loan agreement launched in mid-November. Profit/loss after financial items was SEK -10 (129) million and the profit/loss after estimated tax was SEK -11 (95) million.

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KappAhl AB

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