Waterford Wedgwood will be forced to write off up to €100 million over the next year as it struggles with its inventory, according to NCB analyst Mr John Sheehan.
"It is a concern that group products did not appear to benefit from the more favourable US trading environment in the earlier part of the year," said Mr Sheehan in a note issued yesterday.
His comments came as Waterford Wedgwood's senior debt was downgraded by rating agency Moody's from B1 to B3. This means the agency sees a high credit risk in the debt.
The rating on the firm's €166 million bond, issued late last year, was downgraded to Caa2, which suggests very high risk.
Moody's based the downgrades on Waterford's stretched finances and poor recent trading record.
The agency has kept a negative credit watch on the firm, noting that problems generating cash flow will make it harder for Waterford to support its debt obligations in the future.
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