More credit pressure?
Euler Hermes is the major credit insurer for the UK technology channel. It also apparently insured Woolworths as it has blamed the bankruptcy of the retail chain for a profit warning announced today.
Without stating what its previous outlook had been for the year, Euler Hermes said: "Following the bankruptcy of Woolworths Group (UK) and higher than expected claims development in 4th quarter, Euler Hermes revises its 2008 results to € 100 million."
A look at its 3rd quarter results announcement, made at the end of October, reveals the following statements:
"After financial expenses and taxes, Euler Hermes posted a net profit of 152.3 million Euros over the first nine months 2008, down 57.7% over the first nine months 2007.
"In a worsening economic environment Euler Hermes expects a positive last quarter 2008 result. This estimation excludes events such as big claims or the collapse of the financial markets."
So if it's now expecting a full year profit of €100 million, having amassed a profit of €152.3 million up to and including Q3, that would seem to amount to a loss of around €50 million for Q4.