Sotheby’s reports second-highest net profit ever in Q4

Net income for the fourth quarter was US$73.m, or US$1.09 per share, the group said, compared to a net loss of US$9.3m, or US$0.14 per share, reported for the same period in 2008.

Revenue meanwhile rose 31pc to US$218.3m, beating analysts’ expectations.

Analysts polled by Thomson Reuters had forecast a profit of US$0. 67 a share on revenue of US$201.1m.

Sotheby’s also said that it had managed to reduce expenses by 28pc, or US$47,5m, during the quarter.

Downturn hits 2009 bottom line
For the full-year 2009, consolidated sales were US$2.8bn and revenues totalled US$485, which represented a 30pc decline on 2008.

Sotheby’s said this deterioration was primarily due to the 54pc decrease in net auction sales during 2009, which it attributed to the downturn in the international art market and global economy that began in September 2008.

Net loss for the full-year 2009 was US$6.5m, or US$0.10 per share, compared to a net profit of US$26.5m, or US$0.38 per share, in 2008.

However, the auction house said that excluding restructuring charges of US$12.2m and a gain on the extinguishment of debt of US$1m, it would have made a net profit of US$3.1m or US$0.04 per share, in 2009.

Well poised to capitalise on upturn
“We are delighted and encouraged by our outstanding fourth quarter, which has produced our second-highest fourth-quarter net income,” said Bill Ruprecht, President and Chief Executive of Sotheby’s. “This remarkable achievement could not have been possible without two driving factors: the strong improvement in auction commission margins and our vigilant focus on costs, which has allowed us to deliver a decrease in operating expenses of US$185.3 million in 2009 compared to 2008. We are well poised to capitalise on an economic upturn and art market rebound as it occurs.

“Our worldwide sales last autumn were a significant improvement over their spring equivalents,” Ruprecht added. “Sell-through rates improved virtually across the board and our November sales of Impressionist, Modern and Contemporary Art both exceeded their pre-sale high estimates. More bidders participated in our Impressionist and Modern Art sales than ever before, confirming that buyers will always be active when there is wonderful property that is fresh to the market and attractively estimated.

“The momentum has continued into 2010. We have just held Impressionist, Modern and Contemporary Art sales in London which have been among our best ever, with both sales surpassing their high estimates by wide margins. And, memorably, we have just made history at Sotheby’s with the sale of Alberto Giacometti’s L’homme qui Marche 1, which sold for US$104.3m in our Impressionist and Modern Art evening sale, setting the world record price for a work of art at auction.

“It would have been impossible to imagine these results just one short year ago,” Ruprecht concluded.

Sotheby’s is the only auction house to have sold works at auction above US$100m and the top three works of art sold at auction have now been sold at Sotheby’s. (Picasso’s Garçon a la Pipe (Boy with a Pipe) sold in 2004 for US$104.2m and Picasso’s Dora Maar au Chat sold in 2006 for US$95.2m.

Pictured: Alberto Giacometti's L’homme qui marche I (Walking Man I)

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