Textile supplier Novel Denim Holdings Ltd on Monday posted a fourth quarter net loss of $9.4 million, or $1.01 a share,  as it was hit by the cost of axing its Madagascar factories.

The firm, which produces denim, chino and twill garments as well as woven and printed fabrics, made $3.5m, or 38 cents a share, in the year-ago period.

In a statement, Novel Denim said that without the cost of shutting its Madagascar operations it would have made a loss of 19 cents a share.

Net sales in the period rose 6.5 per cent to $37.5m versus $35.2m in 2001, with garment sales down 10.2 per cent to $26.2m from $29.1m. However, offsetting that fall was a 45.7 per cent increase in third party fabric sales to $8.9m, compared to $6.1m last year.

For the fiscal year ended March 31, net sales increased 14.9 per cent to $158.6m from $138.1m, but net income slumped 82.7 per cent to $2.1m, or 22 cents per share, from $12m, or $1.29 a share, in fiscal 2001.

Company president and CEO, KC Chao, commented: "This past quarter's results reflect the impact of the unexpected events following the presidential elections in Madagascar which, as we previously explained in March, caused the operations to virtually stop.

"The company is now focused on negotiating the removal of our garment equipment and raw materials from Madagascar in what continues to be a difficult environment. A successful conclusion to the negotiations will allow us to re-deploy this equipment to our operations in Mauritius and South Africa."

He continued: "In addition, we experienced garment production disruptions caused by an unanticipated labour dispute involving some of our expatriate employees working in Mauritius."

He added that the firm still expects to earn around $1.00 a share for fiscal 2003.