Mexican Glass Maker Vitro Posts 4Q Net Loss $343M Vs Net $48M

Mexican glass maker Vitro SAB (VTO) Tuesday reported a net loss of $343 million for the fourth quarter of 2008 as sales fell and financial costs increased on derivatives losses and a weaker peso.

In a press release, Vitro said the net loss compared with a profit of $48 million in the fourth quarter of 2007.

Financial costs increased to $446 million from $23 million on losses associated with natural gas hedges and the depreciation of the peso against the dollar.

Vitro defaulted on debt earlier this year and is in negotiations with derivatives counterparties and creditors. The net debt at the end of 2008 was $1.35 billion.

Sales in the fourth quarter rose 18% to $538 million, with sharp declines in both flat glass and glass containers sales as domestic and external demand fell. Operating profit fell 82% to $15 million, and operating cash flow was down 42% at $59 million.

Vitro said that it implemented cost cuts worth $40 million last year and that it expects to generate annual savings of $80 million to $120 million beginning in 2009. The company also cut its capital-expenditure budget for 2009 to $74 million from $176 million last year.