MONTREAL — Dorel Industries Inc. (TSX:DII.B) says foreign exchange losses drove down its profits to US$24.8 million in the second quarter as the consumer products maker' revenue sagged 7.2 per cent largely because of currency fluctuations.
The Montreal-based company, which makes child car seats, home furniture and bicycles, reported Wednesday that its profit amounted to 74 cents per share, down 21 per cent from US$31.3 million or 94 cents per share a year earlier.
Dorel booked US$12.6 million in non-cash losses on mark-to-market foreign exchange contracts. Excluding those losses,the company said earnings would have totalled US$1.01 per share
Dorel, which reports its results in U.S. currency, said lower sales and the impact of foreign exchange fluctuations drove quarterly revenue down to $551.1 million from $593.7 million a year ago.
"For the second consecutive quarter we have surpassed our internal earnings forecasts due to the implementation of stringent cost constraint measures, a focus on working capital management and a more stable cost environment," Dorel president Martin Schwartz said in a statement.
"While sales are down, a significant percentage of the decrease is attributable to foreign exchange translation. High-end bicycle sales are still not where we want them to be as consumers remain selective in their discretionary spending. Overall, our divisions are performing well notwithstanding the challenging economy."
The company's shares started the trading day up 25 cents to $27 on the Toronto Stock Exchange.
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