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Colgate-Palmolive to Take Hit from Venezuela Devaluation

Feb. 11, 2013
Consumer-goods maker anticipates one-time after-tax loss of $120 million in the 2013 first quarter.

Consumer-goods manufacturer Colgate-Palmolive (IW 500/67) said Monday it would take a significant loss in the current quarter from Venezuela's 32% currency devaluation announced last week.

The company said that in a preliminary assessment of the impact of the devaluation of the bolivar, it would take a one-time after-tax loss of $120 million, or 25 cents per share, in the 2013 first quarter, "related to the re-measurement of the local balance sheet at the date of the devaluation."

There would also be an ongoing impact of five to seven cents a share each quarter in 2013 related to adjusting local Venezuela financial statements to the new currency regime, Colgate-Palmolive said.

However, it added, "The devaluation will not have any impact on the company's 2012 results of operations or financial position."

In a long-awaited move, on Friday Caracas announced it would devalue the bolivar by 32%, effective Wednesday, on the orders of cancer-stricken President Hugo Chavez.

The bolivar will move from 4.3 to the dollar to 6.3, at the official exchange rate.

Copyright Agence France-Presse, 2013

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