Kuoni in Possible Resort Writedown
EUROPEAN UNION, February 16, 2006. Kuoni could post a net loss for the 2005 financial year. The tour operator may be forced to make a second writedown on its investment in the Las Playitas resort, Canary Islands.
The second charge may amount to as much as 65 mn Swiss francs ($49.5 mn), which would put the company in the red for its 2005 financial year. Kuoni Reisen Holding AG has a 35 percent stake in the Las Playitas resort, of which it was planning to dispose of.
Kuoni has said that its cash flow and outlook for 2006 remains unaffected by this second writedown.
"Kuoni may have to make further provisions amounting to a maximum of 65 million net of income taxes to cover any contingent liabilities and assuming a conservatively-estimated liquidation value for the Las Playitas property," the company said in a statement.
"In view of the complex legal situation, however, no prognosis can currently be made on the project's further development," the company said.
Shares of Kuoni in Zurich fell nearly five percent to a three-week low on the back of this news.
Kuoni reports full year earnings figures on March 16.
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