| Thu 14 Feb 2008, 17:25 | | CRM - Ceramic Industries Limited - Trading statement |
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CRM
CRM
CRM - Ceramic Industries Limited - Trading statement
CERAMIC INDUSTRIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1982/008520/06)
Share code: CRM
ISIN NUMBER: ZAE000008538
("Ceramic" or "the company")
TRADING STATEMENT
In terms of the JSE Limited Listings Requirements, companies are required to
publish a trading statement as soon as they are reasonably certain that the
financial results for the current reporting period will be more than 20%
different than that of the previous corresponding period.
Shareholders are accordingly advised that the group will report a decline of
approximately 17% to 20%in earnings per share and headline earnings per share
for the six months ended 31 January 2008, in comparison to the prior year.
Trading conditions have deteriorated markedly during the interim period, with
the group being negatively impacted by:
* Consumer spending which came under pressure following significant interest
rate increases during the previous year;
* Demand which skewed towards Ceramic Industries` more commoditised products,
which carry tighter margins; and
* Substantial increases in energy, packaging and other oil related costs
which the group has been unable to recoup in selling prices.
These circumstances were exacerbated by the power interruptions in December and
January which resulted in increased scrap rates, decreased yields and lower
plant efficiencies. Betta Sanitaryware was the worst affected as the power
interruptions resulted in the failure of a shaft on one of its clay mills,
resulting in a 50% reduction in capacity during January 2008.
Unit costs across the group have been negatively affected by the reduced volumes
and higher input costs.
The Aquarius plant, which was commissioned late in the previous financial year,
has taken longer than anticipated to start delivering returns for the group.
Production volumes were transferred, as planned, from Sphinx to Aquarius and
both plants reported losses for the first half of the year.
The stable power supply during February 2008 enabled the plants to resume
operations at capacity. Backlogs in customer deliveries resulting from lower
production during the January power outages are being cleared. Operating
performance for the second half of the year will depend largely on the stability
of the power supply to support ongoing production at capacity, as well as the
state of the South African economy.
The above information has not been reviewed or reported on by the company`s
auditors and the company`s results for the six months ended 31 January 2008 are
expected to be published on 11 March 2008.
Vereeniging
14 February 2008
Sponsor
Nedbank Capital
Date: 14/02/2008 17:25:01 Produced by the JSE SENS Department.
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