The good news for the company is that the figures for the first nine months of the year show a much rosier picture: a net profit of $50.5m compared to a loss of $40.9m for the same period in 2003. Even when the $45m banked in the one-off deal in February to license out Sotheby’s real estate brand is taken into account, it is still a favourable comparison.
Whilst activity has certainly shot up in 2004 – auction turnover for the first nine months is 75 per cent up on 2003 – it is the higher commission rates Sotheby’s have been charging that have done the most to add to the bottom line.
In a week that has seen headline results for Contemporary sales follow the best Impressionist and Modern figures for 14 years, the fourth quarter should help redress the loss suffered during the quieter summer months – but that success may well be tempered by large guarantees in the recent sales.
A closer look at the company’s costs show that the spectre of special charges linked to restructuring, anti-trust matters and staff retention has finally all but vanished. More of a concern is the hike in salaries (25 per cent) and administration costs (17 per cent) for the first nine months of 2003.
Chief executive Bill Ruprecht prepared the market for a soft landing in 2005 by highlighting the landmark sales so far this year. “It is unlikely that auction segment results for the first half of 2005 will be at the level achieved in the first half of 2004 [because of this],” advised the official release.
With the Forbes Fabergé Collection taking what is thought to have been about $100m in a private treaty sale in the summer and the firm setting a world auction record for a painting at $93m hammer for Picasso’s Garçon à la pipe in May, he may have a point.
Having said that, there is still much to keep an eye out for in 2004. Sotheby’s New York will hold a various owners sale of American paintings on December 1 which has a total estimate of $82m. On the same day, their London rooms stage The Russian Sale – aimed at the burgeoning influence of Russian buyers – which is expected to realise between $15m and $21m.
• A full statement of account is available on Sotheby’s website at www.sothebys.com
Sotheby’s enjoy profits at last but look ahead with caution
AUCTION revenues have leapt by nearly a half, year on year, for the third quarter of 2004 at Sotheby’s. But increased costs have meant that they have also registered a slightly bigger loss.
