Pacific Brands
(ASX:PGB) has warned earnings in the first half of 2010 will be hit by losses on currency hedging contracts.
At the company's AGM in Melbourne yesterday, Pac Brands CFO said the company was locked in to an exchange rate of US67 cents until December 31, and had taken out further hedging at more than US80 cents for the fourth quarter.
With the dollar soaring close to US93 cents, Pacific Brands is reportedly facing a possible loss of more than $40 million.
However the company’s CEO Sue Morphet said the year would be balanced by a better second-half performance driven by the clothing group's aggressive cost cutting, which includes job cuts. Pacific Brands made a loss of $234 million in 2009.
