Revenue in Tulip Ltd declined from 7.3 billion DKK in the 2017/18 financial year to 7 billion DKK in 2018/19, while the profit after tax and interest improved from a loss of 370 million DKK in 2017/18 to a loss of 210 million DKK in 2018/19. At the same time, 575 DKK of goodwill has been written down.
- The write-down is slightly higher than what we expected at the end of August. This is because we’ve decided to make provisions for the usual seller guarantees issued to the buyer as part of the deal. This is a way of protecting the company against any negative surprises in the new financial year, says Preben Sunke, Group CFO of Danish Crown.
Tulip Ltd was sold for 2.4 billion DKK. The company had debt of 1.9 billion DKK, so despite the operating loss for the 2018/19 financial year and the write-down of goodwill, Danish Crown’s balance sheet is being strengthened.
In a week’s time, Danish Crown will be publishing its financial statements for the 2018/19 financial year, which will be based on the group’s continuing operations, while the results of Tulip Ltd will feature as a single line in the accounts
The loss in Tulip Ltd will, of course, still be included in Danish Crown’s financial statements for 2018/19, but the write-down of goodwill will not affect the supplementary payments paid to Danish Crown’s owners.
- The supplementary payments to Danish Crown owners are based on Danish Crown’s earnings in the past financial year. This means that the only negative impact on the results distributed by the Board of Directors next week will be from the operating loss generated by Tulip Ltd for the year, says Preben Sunke.
Danish Crown will be publishing its financial statements on Thursday, 21 November at 13.00.