Quebecor World Inc., Montreal, reported a net loss yesterday of $205 million for the fourth quarter ended Dec. 31 compared with net income of $46 million in the year-ago period.
The printer said its fourth-quarter and 2005 results were hurt by a previously announced non-cash goodwill impairment charge of $243 million related to the company's European operations. Quebecor's consolidated revenue in the quarter totaled $1.7 billion, down from $1.8 billion in 2004.
“We continue to face a very challenging environment on several fronts, which is reflected in our results,” Quebecor World president/CEO Pierre Karl Peladeau said in a statement. “Our retooling plan is under way and despite some inefficiencies in the fourth quarter, we expect this equipment to deliver as promised in the medium and long term as it reaches full capacity and as we replace previously lost volume.”
Quebecor World's three-year retooling is based on installing state-of-the-art technology across its global platform and decommissioning older, less productive equipment to enhance service and reduce costs. The previously announced plan calls for an investment of $330 million in North America and $250 million in Europe. This retooling on two continents is one of the largest ever undertaken in the printing industry, and the full effect of these efforts is expected to be realized over time.
Because of the retooling program in North America and Europe, Quebecor World recorded capital expenditures of $394 million in 2005 versus $133 million in 2004 and generated free cash flow of $119 million in 2005 compared with $319 million in 2004.
In 2005, the company's net loss totaled $149 million compared with net income of $140 million last year. Consolidated revenue for 2005 was essentially flat at $6.3 billion.
Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters