One-offs leave Metroglass deep in the red

Metro Performance Glass went deeply into the red with a net loss of $77.9 million in the March 31 year, driven by asset impairments arising from the Covid-19 pandemic.

The company, which last year said it would not pay dividends while it reduced debt, said in yesterday’s result that it had struck a deal with its banks not to pay dividends in 2021, in return for a relaxation of its debt covenants.

Metroglass met its downgraded earnings guidance with earnings of $23.2m before interest, tax and before the one-off costs, down 8 per cent from the previous year.

In November, the company said earnings before interest and tax (Ebit) would probably be between $21m and $24m.

The glass supplier and maker said it had strengthened its group balance sheet with net debt $16.5m lower, but that because of the current uncertainty, management was planning for a variety of scenarios.

“As a consequence of the forecasted significantly lower construction activity, and the increased competitive intensity, a review of the carrying values of Metroglass’ assets resulted in an $86.5m impairment on New Zealand goodwill, which initially arose from acquisitions completed in 2012, before the company’s initial public offer,” it said.

As part of the company’s response to the Covid-19 environment, Metroglass agreed with its banks on a relaxation of the key financial covenant — net debt to Ebitda — from 3.0 times to 4.0 times up to March 31, 2021.

“As part of this relief, the group agreed to provide regular updates to its banking partners and to limit growth capital expenditure and pay no dividends in 2021,” the company said.