Ducati Motor Holding made a net loss of Euro 3.7 million in the first quarter of 2003, compared with a Euro 5.5 million gain in the first quarter of 2002.

For the first quarter of 2003, revenues were Euro 81.3 million, down 23.5% over the same period in 2002, mainly caused by a 23.2% reduction in unit sales and a negative foreign exchange impact.

Revenues from Ducati motorcycles for the period decreased 26.6% to Euro 65.5 million and represented 80.6% of revenues.  Motorcycle-related products, including spare parts, technical accessories and apparel, decreased 9.5% to Euro 15.2 million over the comparable period in the previous year.

Gross margin was 36.9% of revenues versus 42.8% in the period, mainly due to lower unit sales and the negative foreign exchange impact. EBITDA was a Euro 9.0 million, or 11.0% of revenues, versus 18.9% in the period of the previous year.  R&D investments for the Moto GP were Euro 1.6 million, equivalent to 2.0% of sales.

The net loss includes the impact of a one-off Euro 3.5 million restructuring charge which will be used to make the organisation leaner and more efficient in anticipation of the challenging market conditions in 2003.

Unofficial Ducati worldwide registrations, a measure of retail sales, were down 18% versus the first quarter of last year, with the US down 42%, Italy down 21%, Germany down 13%, France down 11%, the UK down 5% and in Japan down 6%, while the Benelux countries grew 6%.

The company's net debt at March 31, 2003 was Euro 123.6 million, down versus the Euro 132.0 million at the same date a year earlier, and up versus Euro 112.4 million at December 31, 2002. Gearing ratio was 78% at March 31, 2002 versus 82% at the same date a year earlier and 69% at December 31, 2002.

"2003 has got off to a very difficult start for Ducati.  The results for the period ending March 31, 2003 represent the weakest first quarter at the company for many years," said chairman and chief executive officer Federico Minoli.

"The principal reasons are clear: a severe decline in our reference market was reflected in our considerably reduced sales in the period; the continued strengthening of the Euro versus the US dollar, UK sterling and the Japanese yen has reduced the value in Euro of our sales in those countries; and start-up issues -- now resolved -- in the early production of the Multistrada and Monster S4R.

"We believe that, with the end of the first quarter, the worst is behind us in 2003, and the results of the period do not reflect our expectations for the full year," added Minoli. "As we move into the important second quarter, we have laid the foundations for a leaner and more efficient organisation by cost-cutting and making management changes, and we are implementing a focused advertising and pricing campaign, in particular in the Monster family, to support sales."