The world’s largest manufacturer of high-end furniture leather and a major supplier to the automotive industry - Svenljunga, Sweden-based Elmo Leather - has posted losses of SEK16 million (£2.13 million) for the full year 2003.
The company cited weak demand for furniture leather in North America and Europe as well as a SEK28 million one-off cost associated with the phasing out of its Danish manufacturing operations. Group sales fell 5% to SEK 771.1 million as volumes of finished leather dropped 0.3 million sq. m. to 2.9 million. Increased average prices did not fully compensate for the reduced volumes. Other factors were an exchange gain equivalent to SEK7.7 million for payment of loans worth $7.5 million, which was charged to 2002’s results, plus the strengthening of the Swedish krona which reduced profits by SEK11.6 million compared with 2002 exchange rates.
In his statement, president and CEO Nalle Johansson said that in spite of the losses, the company was in good shape. Group debt was significantly lower than in the year before (SEK 90.4 million vs. SEK176.7), and demand for furniture leather looked set to increase on the back a recovery in the US and European markets. Assuming no drastic changes occurred in the rawhide market, Johansson expected Elmo Leather’s underlying operations and Group’s profits to improve significantly in 2004.
