TORONTO, Feb 26 (Reuters) - Wescast Industries WCSa.TO said on Tuesday its fourth-quarter loss widened sharply due to a one-time contingent loss for potential income taxes and interest, and said it would suspend its dividend payments.
Wescast reported a net loss of C$13.5 million, or C$1.03 a share, in the three months ended Dec. 30, compared with a net loss of C$3.6 million, or 27 Canadian cents a share, a year earlier.
Wescast, which manufactures exhaust manifolds, said the loss included a C$9.8 million contingent loss over possible taxes and interest due to income tax reassessments it received that denied deductions of some costs from 2002 to 2006.
The company said it would suspend dividend payments in light of its latest results and “the difficult automotive market conditions.” The Board of Directors will review the dividend policy on a periodic basis, the company said.
Brantford, Ontario-based Wescast said it had consolidated sales of C$90.9 million in the quarter, up 7.4 percent from a year earlier amid higher sales volumes in North America.
Wescast said its production volumes in North America in 2008 wouldn’t reach 2007 levels due to lower output levels expected for its primary customer base, but it expects output in Europe to be higher than last year. The company cited industry estimates for this year as projecting a 3.7 percent decline in vehicle production from 2007.
The company said its results were sensitive to raw material prices for scrap steel and moly, which have been impacted by global demand. Wescast said it expected average prices to be higher in 2008 than the averages seen last year.
$1=$0.99 Canadian Reporting by Leah Schnurr; Editing by Bernadette Baum