Delivery delays result in ‘disappointing’ results for Natuzzi
30/11/2017
Revenues of €95.8 million were 6.1% lower than in the same period last year, and the company reported a quarterly operating loss of €8.6 million.
Margins have also been affected this year by the provision of €9.3 million (Q1 2017) for legal proceedings with regard to “the Italian labour issue”, and reorganisation costs of €1 million (Q3 2017) for a staff reduction plan at Santeramo.
However, business in Asia is strong, with sales rising 21% in the third quarter. It operates 10 stores in China and 159 are operated by third-party dealers. “The overall business in Asia-Pacific is constantly improving in volume and profitability,” it said.
It also plans to open three stores in the UK in 2018.
Chief financial officer Vittorio Notarpietro said: “Third quarter results were particularly affected by imbalances between our supply and manufacturing operations mainly deriving from growth in the order flow in the second part of the third quarter, for the Italian plants.
"As a result, and notwithstanding a positive year-to-date order flow, our backlog increased, thus explaining most of the disappointing performance in quarterly sales and earnings.
"We are now fully exploiting our production capacity at the Italian operations in particular. By doing so, we will reduce such backlog and this will sustain sales in the fourth quarter of 2017.”
Although it has factories in China, Romania and Brazil, most of its products are made in Italy, where it has had problems keeping up with wages over the last few years.
In 2013, Natuzzi laid off more than 1,700 workers at its factories in southern Italy due the strong euro, the "unsustainable cost of labour" and domestic recession.
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