Plants to sell Brazil's assetsAs if this company hasn't suffered enough:
https://money.aol.ca/article/rutter-1st-writethru/131311/
Marine electronics company Rutter Inc. (TSX:RUT) plans to sell itsassets in Brazil after reporting its first-quarter loss more thandoubled, results it blames on political circumstances in that countryit says have cut deeply into its revenues.
"After assessing these risks, the board has concluded that it is thebest interest of Rutter Inc. and its shareholders to divest of thisasset," Donald Clarke, chairman and CEO of Rutter Inc., said in astatement Monday.
"We are currently pursuing negotiations with potential buyers with aview to concluding a deal and gaining all appropriate regulatoryapprovals in the current quarter."
Rutter will divest of its ownership in Unicontrol internationalLtda., which it says has been impacted by delays related to the startupof new projects anticipated from the principal Brazilian oil and gasproduction company.
"This is the direct result of a political situation within Braziland has impacted all companies that depend upon the oil and gasindustry in that country," Rutter stated.
Clarke said selling the Brazil assets will "minimize the risk offuture losses" and allow it to focus on expansion it is profitableNorth American markets.
The St. John's N.L.-based company reported a first-quarter net lossof $3.8 million or five cents per share for the period ended Nov. 30,2007 compared to a loss of $1.5 million four cents per share for thesame period in 2006.
Revenue from operations was about $24 million, up 36 per cent from$17.6 million last year. The company's controls and automation segmentsaw a 58.5 per cent increase in revenues or about $4.8 million whilethe technology segment climbed 16 per cent or $1.5 million
In Brazil, quarterly revenues fell almost in half to $2.9 million from $4.7 million in the first quarter of fiscal 2007.
"Unfortunately the gridlock in the award of oil and gas contracts inBrazil has served as a strong reminder of the risks associated withowning an asset that is largely dependent on a single customer in asingle market," Clarke said.
"Although there are indications that things may return to normal inthe third quarter of the current fiscal year, there is no guaranteethat will be the case or that Unicontrol will recover quickly from thesignificant losses it has incurred over these past three quarters."
As for its North American operations, the company cites itsacquisition of Hinz Automation Inc., which closed in June, for itsrevenue boost in the first quarter.
The acquisition more than doubled the size of the controls andautomation segment, taking the employee total from about 200 to almost500.
Rutter Technologies Inc. supplies voyage data recorders, enhancedradar solutions, marine certified interfaces, safety lights and otherelectronics systems.
Prior to Monday's announcement, Rutter shares closed up 5.56 per cent or two cents to 38 cents on the Toronto Stock Exchange.