LOSSES slowed significantly for Hardware and Lumber (H&L) Limited at the end of the three months to September 2010. The company, which has had a long run of losses is seemingly on a path to recovery following a net loss that was 83 per cent lower than the corresponding period in 2009.

H&L recorded net loss of $7 million for the quarter under review compared to the $43 million recorded for the comparative period in 2009.

CEO Simon Roberts said in a statement that reduced finance costs from both lower debt levels and recorded foreign exchange gains on US$ denominated debt resulted in the significantly reduced net losses of $7 million. Finance costs declined 48 per cent over the corresponding quarters to $22.4 million.

Revenues in the company, which trades in hardware, lumber, household items and agricultural products, declined 5.6 per cent for 2010 to just over $1.3 billion. However, the cost to the company for earning said revenue was 7.6 per cent or $81 million less than the corresponding quarter of 2009. A good indication of the improvement is that the gross profit for the period, at $354.4 million was relatively constant with that of the prior year’s quarter, a fact that Roberts attributes to margin management and careful focus on product availability and selection.

“We continue to improve product availability while reducing overall inventory levels, and remain focused on improving our working capital position through the aggressive collection of receivables and retirement of expensive debt,” Roberts outlined.

Other operating income declined 24.6 per cent but a 6.4 per cent decline in operating expenses brought profit from operations up 198 per cent to $11.1 million, from an $11.3 million loss in the comparative quarter of 2009.

However, while results from the retail and wholesale segments continue in the red, the losses have slowed.

The agricultural segment continues to perform, nonetheless with the three months revenues increasing 2.8 per cent according to the CEO.

“The segment is performing well and our products continue to be demanded by our farmers,” Roberts said of the agricultural segment. “The rains associated with Tropical Storm Nicole did extensive damage to several crops and we are ensuring that we are able to provide the necessary inputs to allow the earliest possible recovery of the sector.”

“While we expect the remainder of 2010 to be challenging, we see signs of improvement in consumer confidence and anticipate that the several infrastructural and housing projects announced will in the medium term lead to increased demand for our products,” Roberts said.

The company’s Rapid True Value store, which had been undergoing a refurbishing exercise, opened during the quarter. Roberts said this has contributed to “significant increases in basket size” as customers welcome the improvements in product offering and variety.