Natuzzi reduce losses

Natuzzi have reported a net loss of $3.3 million in the fourth quarter of 2005, an improvement from a net loss of $12.1 million in the same quarter a year earlier. This was less than expected due to news that Natuzzi would benefit from a corporate tax reduction in Brazil where they operate a subsidiary, Italsofa Bahia. For the year, however, the company reported a net loss of $20.8 million, compared with earnings of $22.9 million in 2004. Cash flow from operations came to $28.9 million, down from $85 million the previous year. Fourth-quarter sales decreased 1.5% from a year earlier, to $226.6 million, despite a 4.1% rise in total seats sold. Sales in the Americas jumped 19.7% to $77.2 million, but the gain was offset by weakness elsewhere in the world. Leather-upholstered furniture sales in the fourth quarter amounted to $175.3 million, up 6.4% from a year earlier. Chairman and CEO Pasquale Natuzzi said he was encouraged by the company's $1.2 million in positive earnings before taxes in the fourth quarter, after four quarters in a row of losses. 'In 2006 we will continue to be focused on the initiatives that should make our operations more efficient and profitable', he said. 'At the same time, we have to take into consideration that the industry and currency scenario for 2006 appears to be characterised by the same uncertainties experienced last year. In light of this, we confirm the previously announced targets for 2006 with a positive net profit margin at most at 3% together with an increase in units sold of around 5%.'