Colgate-Palmolive sees "extraordinary losses" over devaluation in Venezuela
The company expects earnings per share to drop some USD 5-7 cents per quarter in 2013, because of the conversion of its financial statements to the new Venezuelan exchange rate
Multinational company Colgate-Palmolive said Monday that due to the devaluation of the Venezuelan currency, it will record extraordinary losses at USD 120 million, or USD 25 cents per share, in the first quarter of 2013.
Colgate expects a reduction in its earnings per share of some USD 5-7 cents per quarter in 2013, because of the conversion of the financial statements to the new Venezuelan exchange rate.
However, the devaluation will have no impact on the company's results or financial position in 2012, said the New York-based firm, according to Reuters.
Venezuela represents 5 percent of the total sales of Colgate.
From January 1, 2010, Colgate designated Venezuela as a hyperinflationary market and since then all the currency fluctuations are recorded in the income of the firm, the company said.
Monday's announcement comes after Colgate reported disappointing results in the fourth quarter in Latin America, mostly due to significant economic and labor problems in Venezuela.
An economic environment increasingly complicated in the Caribbean country hit both the turnover and gross profit of the company in the fourth quarter. The firm faced labor slowdown in its Venezuelan plant during the last quarter of 2012.
A shipment of over 30,000 tons of phosphate arrived at Puerto Cabello port in late July on board the Shi Long Ling, a Chinese-flagged vessel that began its long journey in northern Africa. The cargo boat docked on July 26 after traveling more than 3,200 nautical miles. Undoubtedly, this would just be considered one in many cargo ships crisscrossing the oceans if it were not for the fact that Venezuela has denounced Western Sahara occupation by Morocco and yet purchases the territory's natural resource products from the occupying power.