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February 24, 2009 8:03 am

TomTom lost $1.3bn in fourth quarter

Reuters
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AMSTERDAM, Feb 24 - Dutch navigation device maker TomTom reported a €989m ($1.3bn) net loss on Tuesday, citing a writedown on its Tele Atlas acquisition, and said it was considering renegotiating its debt again.

Given the economic downturn and its knock-on effect on consumer spending, TomTom said ”scenarios can be envisaged where the loan covenants could be breached” and that it was exploring options, including renegotiating terms.

Harold Goddijn, TomTom’s chief executive, would not comment on whether the options also include a share issue -- something that analysts have said was a possibility.

Last October, the company renegotiated the covenant on the loan it took out to buy Tele Atlas, but has not disclosed the exact terms. TomTom borrowed €1.6bn to fund the acquisition earlier that year.

TomTom, which makes portable navigation devices for cars, bought digital map supplier Tele Atlas for €2.9bn after its main rival, US market leader Garmin, drove the price up in a bidding war.

“We expect trading conditions to continue to be challenging throughout 2009 and we are adjusting our cost base accordingly,” Mr Goddijn said in a statement.

Fourth-quarter net profit, excluding the €1bn Tele Atlas writedown and other special items, was €70m.

That compared with an average estimate of €26m in a Reuters survey, with estimates ranging from €12m to €37m.

TomTom said it expects to sell between 11m and 12m units in 2009, generating revenue of between €1.4bn and €1.6bn.

TomTom shares hit an all-time low of €3.20 on Monday and closed at €3.26, valuing the company at €425m.

In 2007, its shares touched an all-time high of €68.15.

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