Springs Posts Net Loss of $10.4 Million in 2010
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MONTES CLAROS, Brazil-Increased expenses for selling, interest and bank charges, and taxes drove Springs Global's bottom line to a net loss of $10.4 million for 2010.
The loss reversed net income for 2009 of $20.5 million, with both dollar figures derived from the annual currency-conversion rate of the Brazilian real to the U.S. dollar for both years. After these conversions, Springs Global's net revenues actually gained 8.5 percent in U.S. dollars, even though it showed a decline of 3.3 percent in Brazilian reals. Net revenues for 2010 totaled $1.3 billion. For the year, the Brazilian real's value increased 11.6 percent against the dollar.
Total selling, general and administrative expenses rose 3.6 percent in 2010, and picked up 104 basis points as a percentage of revenues to 15.3 percent. Financial expenses including interest and bank charges increased 17 percent, and income and social-contribution taxes jumped 434 percent for the year.
A Springs Global statement said the significant increases in worldwide cotton prices last year played a huge role in the company's bottom-line red ink. "Our suppliers started to adjust their prices almost daily and at the same intensity with which the prices of this noble textile fiber hit record highs," the company said.