Costs related to an unfavourable Eurpean tax ruling contributed to an $11-million fourth-quarter loss for Groupe Aeroplan , the former Air Canada subsidiary that runs loyalty-points programs for other companies.
The loss amounted to seven cents per share and contrasted with a year-earlier profit of $20.5-million or 10 cents per share.
Despite the tax ruling, which was the culmination of a multi-year dispute, chief executive Rupert Duchesne said Friday the company performed well in 2011 and is positioned this year to grow globally.
"It truly has been a rewarding year for Groupe Aeroplan," Mr. Duchesne told analysts during a conference call to discuss the financial results.
"Each of our businesses have shown strong growth and excluding the impact of the adverse VAT (value-added tax) judgment, we've achieved our financial objectives for the year."
The Montreal-based company said the quarter's loss included a $3.8-million expense related to a court decision against Loyalty Management Group, which was acquired by Aeroplan in December 2007.
The litigation between the U.K. tax authorities and Loyalty Management Group since 2003 was related to the way value-added tax remittances were calculated by the acquired company.
Mr. Duchesne said that Aeroplan expects to mitigate the negative impact of the ruling by the end of 2011.
Aeroplan also recognized a number of costs associated with its acquisition of Carlson Marketing, including $4.3-million in transition costs, $1.1-million in retention bonuses and rewards and $1.9-million in consulting fees.
Revenue was up year-over-year, rising to $607.8-million from $424.8-million in the fourth quarter of 2009. Adjusting for exchange rates, revenue would have been $621.4-million if the Canadian dollar was unchanged against other currencies.
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