Rodriguez Group reports €78.4 million current operating loss

The 1st half-year of Rodriguez Group’s 2008/2009 fiscal year ended on March 31, 2009. The financial statements as at March 31, 2009 were approved by the Management Board and Supervisory Board on July 23, 2009 and are available on the company’s website.

The Group reported half-year sales of € 49.2 million, compared to € 177.0 million over the 1st half-year 2007/2008 (1).
This step back in sales was attributable to the continuing strong deterioration in the luxury yachting market, which caused significant reductions in transaction volumes and prices. 1st half-year 2008/2009 sales may be analyzed as follows: yacht sales 76%, services: 24%.

Taking into account the loss generated and provision charges required by the Yacht business, the Group reports a € 78.4 million Current Operating Loss, compared to a € 6.5 million profit in the 1st half-year 2007/08. Provisions for write-offs (net of releases) made during the 1st half-year 2008/09 amounted to € 25.5 million (1).

Net loss – Group share was € 63.9 million (1), compared to a € 2.8 million profit in 2007/08, after taking into account a € 29.2 million deferred tax asset.
(1) Audited data

Safeguard optimization

The Group intends to continue optimizing the safeguard procedure (2) with a view to analyzing and defining the bases for the Group’s recovery.

The current action plan, which will continue over the coming months, is organized around 5 priorities and should enable the Group to significantly reduce its losses as from the second half of 2009.

1/ IMPLEMENTATION OF A GENERAL COST REDUCTION PROGRAM

In light of the sudden and significant decline in sales, the Company has implemented a general cost reduction program over all its indirect costs (other purchases and external charges primarily). This plan targets a reduction in indirect charges in excess of 40% in 2009.

2/ GENERATING CASH

Marketing efforts were focused on the sale and delivery of both new and pre-owned yachts held as inventory.
Yachts trade-ins, previously a common practice, have become an exception.

3/ CHANGES IN PARTNERSHIPS WITH SHIPYARDS

The Group continues its exclusive marketing contract and long-standing relationship with the Overmarine shipyard, which manufactures Mangustas. However, the construction of unsold new units are on hold.
With respect to the Arno Group, which manufactures Leopards, the crisis had generated tension between the two Groups. The two companies are currently looking for a solution to insure the building and delivery of a number of units in progress and work on a non-exclusive basis in the future.

4/ NEW DEVELOPMENTS

In order to confirm its position as leader for large open yachts, as well as its image as industry pioneer, the Group continues to develop new models, in particular in aluminum. The marketing of these new projects, of a size ranging from 50 to 62 meters, will increase over the coming months.

5/ SAFEGUARD EXTENSION APPLICATION

In order to extend the implementation of the ongoing restructuring measures and prepare a viable safeguard exit plan, the Group intends to apply for a renewal of the six month period, which is due to expire on October 7, 2009.

PUBLICATION OF ANNUAL FINANCIAL STATEMENTS

The annual financial statements of RODRIGUEZ GROUP’s 2007/2008 fiscal year ended on September 30, 2008 as approved by the Management Board and Supervisory Board on July 23, 2009 are available on the company’s website.

The Annual General Meeting called to approve the financial statements at September 30, 2008 will be held on Monday, October 26, 2009, in Hotel Carlton, 58 Boulevard de la Croisette, Cannes, France at 9am.

(2) Note: Rodriguez Group elected on April 7, 2009 for the safeguard option, a French legal regime reserved for companies that prove not to be insolvent, which enables them to continue their operations under normal conditions. The safeguard procedures allow a company to withhold the payment of its outstanding liabilities, to be repaid in accordance with a repayment schedule.

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