﻿ Kimberly-Clark and Ford take currency charges on bolivar - Taipei Times
Mon, Jan 26, 2015 - Page 15　News List

Kimberly-Clark and Ford take currency charges on bolivar


Ford Motor Co and Kimberly-Clark Corp are taking fourth-quarter charges because of difficulties exchanging US dollars for Venezuelan bolivars.

Ford said on Friday it would take a one-time pretax charge of US$800 million that would reduce its fourth quarter net income by about US$700 million. Dallas-based Kimberly-Clark Corp said it would take a US$462 million charge to revalue its bolivar-denominated assets.

The bolivar’s lack of liquidity has affected several US-based companies. Clorox Co pulled out of Venezuela last year, while Brink’s Co took a writedown. United Continental Holdings Inc, American Airlines Group Inc and Delta Air Lines Inc have all pared service to Latin America’s largest oil exporter.

Venezuelan President Nicolas Maduro on Thursday said the country would create its fifth parallel currency market in 12 years to boost US dollar supplies.

The new market would allow private companies and individuals to trade the US dollar through brokerages, he said, adding that the government is to continue to import essential products at the primary exchange rate of 6.3 bolivars to the US dollar.

On the black market, one US dollar buys 183 bolivars, according to dolartoday.com, a Web site that tracks the rate on the Colombian border with Venezuela.

Kimberly-Clark said the government’s alternative rate of about 50 bolivars to the US dollar is more accurate than the official 6.3 rate. Kimberly-Clark switched to a floating from a fixed exchange rate as volatility in Venezuela increased with falling oil prices.

Ford’s US$500 million cash balance in its Venezuelan operations would no longer be included in the company’s automotive gross cash, the company said on Friday.

The automaker said it would count cash and income from Venezuelan operations only when the parent company is paid for parts sold to the unit or it pays dividends to the parent.

The second-largest US automaker said it does not affect the full-year pretax profit forecast of about US$6 billion.

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